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Delaware | 7832 | 20-5490327 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Terry M. Schpok, P.C. Akin Gump Strauss Hauer & Feld LLP 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201 Telephone: (214) 969-2800 | D. Rhett Brandon, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 Telephone: (212) 455-3615 |
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The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
Per Share | Total | |||||||
Public offering price | $ | $ | ||||||
Underwriting discount | $ | $ | ||||||
Proceeds to Cinemark Holdings, Inc. (before expenses) | $ | $ | ||||||
Proceeds to the Selling Stockholders (before expenses) | $ | $ |
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F-1 | ||||||||
Amendment to Credit Agreement | ||||||||
Exhibitor Services Agreement | ||||||||
Third Amended and Restated Limited Liability Company Operating Agreement | ||||||||
Consent of Deloitte & Touche LLP | ||||||||
Consent of Grant Thornton LLP |
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• | Advertising: NCM develops, produces, sells and distributes a branded, pre-feature entertainment and advertising program called “FirstLook,” along with an advertising program for its lobby entertainment network, or LEN, and various marketing and promotional products in theatre lobbies; | |
• | CineMeetings: NCM provides live and pre-recorded networked and single-site meetings and events in the theatres throughout its network; and |
• | Digital Programming Events: NCM distributes live and pre-recorded concerts, sporting events and other non-film entertainment programming to theatres across its digital network. |
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• | our dependency on motion picture production and performance could have a material adverse effect on our business; | |
• | a deterioration in relationships with film distributors could adversely affect our ability to license commercially successful films at reasonable rental rates; |
• | we may not be able to successfully execute our business strategy because of the competitive nature of our industry as well as increasing competition from alternative forms of entertainment; |
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• | alternative or “downstream” film distribution channels that may drive down movie theatre attendance, limit ticket price growth and shrink video release windows; |
• | our substantial lease and debt obligations could impair our liquidity and financial condition; and | |
• | we may not be able to identify suitable locations for expansion or generate additional revenue opportunities. |
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Common stock offered by us | shares | |
Common stock offered by the selling stockholders | shares | |
Common stock to be outstanding after the offering | shares |
Underwriter’s option | The selling stockholders have granted the underwriter a30-day option to purchase up to an aggregate of additional shares of our common stock if the underwriter sells more than shares in this offering. | |
Dividend policy | Following this offering, we intend to pay a quarterly cash dividend at an annual rate initially equal to $ per share (or a quarterly rate initially equal to $ per share) of common stock, commencing in the quarter of 2007, which will be a partial dividend paid on a pro rata basis depending on the closing date for this offering. The declaration of future dividends on our common stock will be at the discretion of our Board of Directors and will depend upon many factors, including our results of operations, financial condition, earnings, capital requirements, limitations in our debt agreements and legal requirements. See “Dividend Policy.” | |
Use of proceeds | We expect to use the net proceeds that we receive from this offering to repay outstanding debt and for working capital and other general corporate purposes. See “Use of Proceeds.” We will not receive any proceeds from the sale of shares by the selling stockholders. |
Lehman Brothers Inc. acted as initial purchaser in connection with the offerings of our 93/4% senior discount notes and our 9% senior subordinated notes. An affiliate of Lehman Brothers Inc. was the arranger and is a lender and the administrative agent under our new senior secured credit facility. |
Proposed New York Stock Exchange symbol | “CNK” |
• | shares of our common stock issuable upon the exercise of outstanding stock options, which have a weighted average exercise price of $ per share; and | |
• | an aggregate of shares of our common stock reserved for future issuance under our 2006 Long Term Incentive Plan. |
• | assumes no exercise of the underwriter’s option to purchase up to an aggregate of additional shares of our common stock; and | |
• | assumes an initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus. |
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Cinemark, Inc. | Cinemark Holdings, Inc. | ||||||||||||||||||||
Predecessor | Successor | ||||||||||||||||||||
Period from | Period from | ||||||||||||||||||||
January 1, | April 2, | ||||||||||||||||||||
2004 | 2004 | Pro Forma | |||||||||||||||||||
to | to | Year Ended | Year Ended | Year Ended | |||||||||||||||||
April 1, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
2004 | 2004 | 2005 | 2006 | 2006 | |||||||||||||||||
(Dollars in thousand, except per share data) | |||||||||||||||||||||
Statement of Operations Data(1): | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Admissions | $ | 149,134 | $ | 497,865 | $ | 641,240 | $ | 760,275 | $ | 1,029,881 | |||||||||||
Concession | 72,480 | 249,141 | 320,072 | 375,798 | 487,416 | ||||||||||||||||
Other | 12,011 | 43,611 | 59,285 | 84,521 | 94,807 | ||||||||||||||||
Total Revenue | $ | 233,625 | $ | 790,617 | $ | 1,020,597 | $ | 1,220,594 | $ | 1,612,104 | |||||||||||
Operating Income | 556 | 73,620 | 63,501 | 127,369 | 175,579 | ||||||||||||||||
Income (loss) from continuing operations | (9,068 | ) | (7,842 | ) | (25,408 | ) | 841 | (3,548 | ) | ||||||||||||
Net income (loss) | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | $ | (3,548 | ) | |||||||
Net income (loss) per share: | |||||||||||||||||||||
Basic | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | $ | 0.03 | $ | (0.11 | ) | |||||||
Diluted | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | $ | 0.03 | $ | (0.11 | ) | |||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 40,614 | 27,675 | 27,784 | 28,713 | 31,284 | ||||||||||||||||
Diluted | 40,614 | 27,675 | 27,784 | 29,278 | 31,284 | ||||||||||||||||
Other Financial Data: | |||||||||||||||||||||
Cash flow provided by (used for): | |||||||||||||||||||||
Operating activities | $ | 10,100 | $ | 112,986 | $ | 165,270 | $ | 155,662 | |||||||||||||
Investing activities | (16,210 | ) | (100,737 | ) | (81,617 | ) | (631,747 | )(2) | |||||||||||||
Financing activities | 346,983 | (361,426 | ) | (3,750 | ) | 439,977 | |||||||||||||||
Capital expenditures | (17,850 | ) | (63,158 | ) | (75,605 | ) | (107,081 | ) | |||||||||||||
Non-GAAP Data(1)(3): | |||||||||||||||||||||
Adjusted EBITDA | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | $ | 360,364 | |||||||||||
Adjusted EBITDA margin | 21.7 | % | 22.6 | % | 20.6 | % | 22.3 | % | 22.4 | % |
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Cinemark Holdings, Inc. | ||||||||||||
Successor | ||||||||||||
As of | ||||||||||||
December 31, | ||||||||||||
2004 | 2005 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Balance Sheet Data: | ||||||||||||
Cash and cash equivalents | $ | 100,248 | $ | 182,199 | $ | 147,099 | ||||||
Theatre properties and equipment, net | 794,723 | 803,269 | 1,324,572 | |||||||||
Total assets | 1,831,855 | 1,864,852 | 3,171,582 | |||||||||
Total long-term debt and capital lease obligations, including current portion | 1,026,055 | 1,055,095 | 2,027,480 | |||||||||
Stockholders’ equity | 533,200 | 519,349 | 689,297 | |||||||||
Cinemark Inc. | Cinemark Holdings, Inc. | ||||||||||||||||||||
Predecessor | Successor | Cinemark | |||||||||||||||||||
Period from | Period from | and | |||||||||||||||||||
January 1, | April 2, | Century | |||||||||||||||||||
2004 | 2004 | Combined | |||||||||||||||||||
to | to | Year Ended | Year Ended | Year Ended | |||||||||||||||||
April 1, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
2004 | 2004 | 2005 | 2006 | 2006 | |||||||||||||||||
(Attendance in thousands) | |||||||||||||||||||||
Operating Data: | |||||||||||||||||||||
United States(4) | |||||||||||||||||||||
Theatres operated (at period end) | 191 | 191 | 200 | 281 | 281 | ||||||||||||||||
Screens operated (at period end) | 2,262 | 2,303 | 2,417 | 3,523 | 3,523 | ||||||||||||||||
Total attendance(1) | 25,790 | 87,856 | 105,573 | 118,714 | 155,981 | ||||||||||||||||
International(5) | |||||||||||||||||||||
Theatres operated (at period end) | 95 | 101 | 108 | 115 | 115 | ||||||||||||||||
Screens operated (at period end) | 835 | 869 | 912 | 965 | 965 | ||||||||||||||||
Total attendance(1) | 15,791 | 49,904 | 60,104 | 59,550 | 59,550 | ||||||||||||||||
Worldwide(4)(5) | |||||||||||||||||||||
Theatres operated (at period end) | 286 | 292 | 308 | 396 | 396 | ||||||||||||||||
Screens operated (at period end) | 3,097 | 3,172 | 3,329 | 4,488 | 4,488 | ||||||||||||||||
Total attendance(1) | 41,581 | 137,760 | 165,677 | 178,264 | 215,531 |
(1) | Statement of Operations Data (other than net income (loss)), non-GAAP Data and attendance data exclude the results of the two United Kingdom theatres and the eleven Interstate theatres for all periods presented as these theatres were sold during the period from April 2, 2004 through December 31, 2004. The results of operations for these theatres in the 2004 periods are presented as discontinued operations. See note 7 to our annual consolidated financial statements. |
(2) | Includes the cash portion of the Century acquisition purchase price of $531.2 million. |
(3) | We set forth our definitions of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of net income (loss) to Adjusted EBITDA at “— Non-GAAP Financial Measures and Reconciliations.” |
(4) | The data excludes certain theatres operated by us in the U.S. pursuant to management agreements that are not part of our consolidated operations. |
(5) | The data excludes certain theatres operated internationally through our affiliates that are not part of our consolidated operations. |
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Cinemark, Inc. | Cinemark Holdings, Inc. | ||||||||||||||||||||
Predecessor | Successor | ||||||||||||||||||||
Period from | Period from | Pro Forma | |||||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | Year Ended | |||||||||||||||||
to April 1, | to December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
2004 | 2004 | 2005 | 2006 | 2006 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Net Income (loss) | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | $ | (3,548 | ) | |||||||
Add (deduct): | |||||||||||||||||||||
Income taxes | (3,703 | ) | 18,293 | 9,408 | 12,685 | 6,520 | |||||||||||||||
Interest expense(1) | 12,562 | 58,149 | 84,082 | 109,328 | 168,051 | ||||||||||||||||
Other (income) expense | 765 | 5,020 | (4,581 | ) | 4,515 | 4,556 | |||||||||||||||
(Income) loss from discontinued operations, net of taxes | 1,565 | (4,155 | ) | — | — | — | |||||||||||||||
Depreciation and amortization | 16,865 | 58,266 | 81,952 | 95,821 | 137,745 | ||||||||||||||||
Amortization of net favorable leases | — | 3,087 | 4,174 | 3,649 | 3,671 | ||||||||||||||||
Amortization of tenant allowances | — | — | — | — | (1,303 | ) | |||||||||||||||
Impairment of long-lived assets | 1,000 | 36,721 | 51,677 | 28,537 | 28,943 | ||||||||||||||||
(Gain) loss on sale of assets and other | (513 | ) | 3,602 | 4,436 | 7,645 | 7,706 | |||||||||||||||
Deferred lease expenses | 560 | 3,336 | 4,395 | 5,730 | 5,159 | ||||||||||||||||
Stock option compensation and change of control expenses related to the MDP Merger | 31,995 | — | — | — | — | ||||||||||||||||
Amortized compensation — stock options | 145 | — | — | 2,864 | 2,864 | ||||||||||||||||
Adjusted EBITDA | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | $ | 360,364 | |||||||||||
Adjusted EBITDA margin | 21.7 | % | 22.6 | % | 20.6 | % | 22.3 | % | 22.4 | % |
(1) | Includes amortization of debt issue costs. |
Century Theatres, Inc. | ||||||||||||
Year Ended | Year Ended | Year Ended | ||||||||||
September 30, | September 29, | September 28, | ||||||||||
2004 | 2005 | 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Net Income | $ | 33,242 | $ | 27,256 | $ | 18,124 | ||||||
Add (deduct): | ||||||||||||
Income taxes | 21,216 | 17,310 | 12,674 | |||||||||
Interest expense | 11,713 | 13,081 | 29,367 | |||||||||
Other (income) expense | (1,045 | ) | (1,403 | ) | (282 | ) | ||||||
Income (loss) from discontinued operations, net of taxes | — | — | — | |||||||||
Depreciation and amortization | 45,635 | 49,500 | 47,116 | |||||||||
Amortization of net favorable leases | — | — | — | |||||||||
Amortization of tenant allowances | (1,734 | ) | (1,738 | ) | (1,738 | ) | ||||||
Impairment of long-lived assets | 295 | — | 406 | |||||||||
Loss on sale of assets and other | 110 | 4,967 | 61 | |||||||||
Deferred lease expenses | 1,803 | 744 | (565 | ) | ||||||||
Change of control expenses related to acquisition (1) | — | — | 15,672 | |||||||||
Amortized compensation-stock options(2) | — | — | — | |||||||||
Adjusted EBITDA | $ | 111,235 | $ | 109,717 | $ | 120,835 | ||||||
Adjusted EBITDA margin | 22.3 | % | 22.5 | % | 23.4 | % |
(1) | Reflects change of control payments of $15.7 million as a result of the Century acquisition. | |
(2) | Century had no stock option plan during the periods presented. |
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• | making it more difficult for us to satisfy our obligations; | |
• | requiring us to dedicate a substantial portion of our cash flow to payments on our lease and debt obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends; | |
• | impeding our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate purposes; | |
• | subjecting us to the risk of increased sensitivity to interest rate increases on our variable rate debt, including our borrowings under our new senior secured credit facility; and | |
• | making us more vulnerable to a downturn in our business and competitive pressures and limiting our flexibility to plan for, or react to, changes in our business. |
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• | authorization of our Board of Directors to issue shares of preferred stock without stockholder approval; | |
• | a board of directors classified into three classes of directors with the directors of each class having staggered, three-year terms; | |
• | provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual meetings of our stockholders; and | |
• | provisions of Delaware law that restrict many business combinations and provide that directors serving on classified boards of directors, such as ours, may be removed only for cause. |
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• | future revenues, expenses and profitability; | |
• | the future development and expected growth of our business; | |
• | projected capital expenditures; | |
• | attendance at movies generally or in any of the markets in which we operate; | |
• | the number or diversity of popular movies released and our ability to successfully license and exhibit popular films; | |
• | national and international growth in our industry; | |
• | competition from other exhibitors and alternative forms of entertainment; and | |
• | determinations in lawsuits in which we are defendants. |
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• | on an actual basis; |
• | on an as adjusted to reflect our receipt of the estimated net proceeds from this offering at an assumed initial public offering price of $ per share, and the application of those proceeds. |
As of December 31, 2006 | ||||||||
Actual | As Adjusted | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 147,099 | $ | |||||
Long-term debt, including current maturities: | ||||||||
New Senior Secured Credit Facility | 1,117,200 | |||||||
93/4% Senior Discount Notes due 2014 | 434,073 | |||||||
9% Senior Subordinated Notes due 2013(1) | 350,820 | |||||||
Capital lease obligations | 115,827 | |||||||
Other indebtedness | 9,560 | |||||||
Total debt | 2,027,480 | |||||||
Minority interest in subsidiaries | 16,613 | |||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value, authorized shares, actual, pro forma and pro forma as adjusted issued and outstanding | 31 | |||||||
Additional paid-in capital | 685,495 | |||||||
Accumulated other comprehensive loss | 11,463 | |||||||
Retained earnings (deficit) | (7,692 | ) | ||||||
Total stockholders’ equity | 689,297 | |||||||
Total capitalization | $ | 2,733,390 | ||||||
(1) | Actual and as adjusted amounts shown include unamortized debt premiums of approximately $18.6 million associated with the issuance of the 9% senior subordinated notes. On March 6, 2007, we commenced a cash tender offer for any and all of our 9% senior subordinated notes, of which approximately $332.2 million aggregate principal amount remains outstanding. We expect to fund the repurchase with the net proceeds received from the NCM transactions. |
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Assumed initial public offering price per share of common stock | $ | |||||||
Net tangible book value per share as of December 31, 2006 | $ | |||||||
Increase per share attributable to new investors | $ | |||||||
Net tangible book value per share after the offering | $ | |||||||
Net tangible book value dilution per share to new investors | $ | |||||||
Average | ||||||||||||||||||||
Shares Purchased | Total Consideration | Price Per | ||||||||||||||||||
Number | Percent | Amount | Percent | Share | ||||||||||||||||
Existing stockholders | % | $ | % | $ | ||||||||||||||||
New investors | % | $ | % | |||||||||||||||||
Total | % | $ | % | |||||||||||||||||
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Cinemark Holdings, Inc. | |||||||||||||||||||||||||||||
Cinemark, Inc. | Successor | ||||||||||||||||||||||||||||
Predecessor | Period from | ||||||||||||||||||||||||||||
Period from | April 2, | Pro Forma | |||||||||||||||||||||||||||
Year Ended | January 1,2004 | 2004 | Year Ended | Year Ended | |||||||||||||||||||||||||
December 31, | to | to | December 31, | December 31, | |||||||||||||||||||||||||
2002 | 2003 | April 1, 2004 | December 31, 2004 | 2005 | 2006 | 2006 | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
Statement of Operations Data(1): | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Admissions | $ | 595,287 | $ | 597,548 | $ | 149,134 | $ | 497,865 | $ | 641,240 | $ | 760,275 | $ | 1,029,881 | |||||||||||||||
Concession | 291,807 | 300,568 | 72,480 | 249,141 | 320,072 | 375,798 | 487,416 | ||||||||||||||||||||||
Other | 48,760 | 52,756 | 12,011 | 43,611 | 59,285 | 84,521 | 94,807 | ||||||||||||||||||||||
Total Revenue | $ | 935,854 | $ | 950,872 | $ | 233,625 | $ | 790,617 | $ | 1,020,597 | $ | 1,220,594 | $ | 1,612,104 | |||||||||||||||
Operating Income | 130,443 | 135,563 | 556 | 73,620 | 63,501 | 127,369 | 175,579 | ||||||||||||||||||||||
Income (loss) from continuing operations | 40,509 | 47,389 | (9,068 | ) | (7,842 | ) | (25,408 | ) | 841 | (3,548 | ) | ||||||||||||||||||
Net income (loss) | $ | 35,476 | $ | 44,649 | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | (3,548 | ) | ||||||||||||
Net income (loss) per share: | |||||||||||||||||||||||||||||
Basic | $ | 0.88 | $ | 1.10 | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | $ | 0.03 | (0.11 | ) | ||||||||||||
Diluted | $ | 0.87 | $ | 1.09 | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | $ | 0.03 | (0.11 | ) | ||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||||||
Basic | 40,513 | 40,516 | 40,614 | 27,675 | 27,784 | 28,713 | 31,284 | ||||||||||||||||||||||
Diluted | 40,625 | 40,795 | 40,614 | 27,675 | 27,784 | 29,278 | 31,284 | ||||||||||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||
Cash flow provided by (used for): | |||||||||||||||||||||||||||||
Operating activities | $ | 150,119 | $ | 135,522 | $ | 10,100 | $ | 112,986 | $ | 165,270 | $ | 155,662 | |||||||||||||||||
Investing activities | (34,750 | ) | (47,151 | ) | (16,210 | ) | (100,737 | ) | (81,617 | ) | (631,747 | )(2) | |||||||||||||||||
Financing activities | (96,140 | ) | (45,738 | ) | 346,983 | (361,426 | ) | (3,750 | ) | 439,977 | |||||||||||||||||||
Capital expenditures | (38,032 | ) | (51,002 | ) | (17,850 | ) | (63,158 | ) | (75,605 | ) | (107,081 | ) | |||||||||||||||||
Non-GAAP Data(1)(3): | |||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 206,270 | $ | 210,122 | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | 360,364 | ||||||||||||||||
Adjusted EBITDA margin | 22.0 | % | 22.1 | % | 21.7 | % | 22.6 | % | 20.6 | % | 22.3 | % | 22.4 | % |
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Cinemark, Inc. | Cinemark Holdings, Inc. | ||||||||||||||||||||
Predecessor | Successor | ||||||||||||||||||||
As of December 31, | |||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||
(In thousands) | |||||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Cash and cash equivalents | $ | 63,719 | $ | 107,322 | $ | 100,248 | $ | 182,199 | $ | 147,099 | |||||||||||
Theatre properties and equipment, net | 791,731 | 775,880 | 794,723 | 803,269 | 1,324,572 | ||||||||||||||||
Total assets | 916,814 | 960,736 | 1,831,855 | 1,864,852 | 3,171,582 | ||||||||||||||||
Total long-term debt and capital lease obligations, including current portion | 692,587 | 658,431 | 1,026,055 | 1,055,095 | 2,027,480 | ||||||||||||||||
Stockholders’ equity | 27,664 | 76,946 | 533,200 | 519,349 | 689,297 |
Cinemark | |||||||||||||||||||||||||||||
Cinemark, Inc. | Cinemark Holdings, Inc. | and | |||||||||||||||||||||||||||
Predecessor | Successor | Century | |||||||||||||||||||||||||||
Period From | Period From | Combined | |||||||||||||||||||||||||||
Year Ended | January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | |||||||||||||||||||||||||
December 31, | to | to | December 31, | December 31, | |||||||||||||||||||||||||
2002 | 2003 | April 1, 2004 | December 31, 2004 | 2005 | 2006 | 2006 | |||||||||||||||||||||||
(Attendance in thousands) | |||||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||
United States(4)(6) | |||||||||||||||||||||||||||||
Theatres operated (at period end) | 188 | 189 | 191 | 191 | 200 | 281 | 281 | ||||||||||||||||||||||
Screens operated (at period end) | 2,215 | 2,244 | 2,262 | 2,303 | 2,417 | 3,523 | 3,523 | ||||||||||||||||||||||
Total attendance(1) | 111,959 | 112,581 | 25,790 | 87,856 | 105,573 | 118,714 | 155,981 | ||||||||||||||||||||||
International(5) | |||||||||||||||||||||||||||||
Theatres operated (at period end) | 92 | 97 | 95 | 101 | 108 | 115 | 115 | ||||||||||||||||||||||
Screens operated (at period end) | 816 | 852 | 835 | 869 | 912 | 965 | 965 | ||||||||||||||||||||||
Total attendance(1) | 60,109 | 60,553 | 15,791 | 49,904 | 60,104 | 59,550 | 59,550 | ||||||||||||||||||||||
Worldwide(4)(5)(6) | |||||||||||||||||||||||||||||
Theatres operated (at period end) | 280 | 286 | 286 | 292 | 308 | 396 | 396 | ||||||||||||||||||||||
Screens operated (at period end) | 3,031 | 3,096 | 3,097 | 3,172 | 3,329 | 4,488 | 4,488 | ||||||||||||||||||||||
Total attendance(1) | 172,068 | 173,134 | 41,581 | 137,760 | 165,677 | 178,264 | 215,531 |
(1) | Statement of Operations Data (other than net income (loss)),non-GAAP Data and attendance data exclude the results of the two United Kingdom theatres and the eleven Interstate theatres for all periods presented as these theatres were sold during the period from April 2, 2004 to December 31, 2004. The results of operations for these theatres in the 2003 and 2004 periods are presented as discontinued operations. See note 7 to our annual consolidated financial statements. |
(2) | Includes the cash portion of the Century acquisition purchase price of $531.2 million. |
(3) | We set forth our definitions of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of net income (loss) to Adjusted EBITDA at “— Non-GAAP Financial Measures and Reconciliation.” |
(4) | The data excludes certain theatres operated by us in the U.S. pursuant to management agreements that are not part of our consolidated operations. |
(5) | The data excludes certain theatres operated internationally through our affiliates that are not part of our consolidated operations. |
(6) | The data for 2003 excludes theatres, screens and attendance for eight theatres and 46 screens acquired on December 31, 2003, as the results of operations for these theatres are not included in our 2003 consolidated results of operations. |
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Cinemark, Inc. | Cinemark Holdings, Inc. | ||||||||||||||||||||||||||||
Predecessor | Successor | ||||||||||||||||||||||||||||
Period From | |||||||||||||||||||||||||||||
Period From | April 2, | Pro Forma | |||||||||||||||||||||||||||
January 1, | 2004 to | Year Ended | Year Ended | ||||||||||||||||||||||||||
Year Ended December 31, | 2004 to | December 31, | December 31, | December 31, | |||||||||||||||||||||||||
2002 | 2003 | April 1, 2004 | 2004 | 2005 | 2006 | 2006 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Net Income (loss) | $ | 35,476 | $ | 44,649 | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | $ | (3,548 | ) | |||||||||||
Add (deduct): | |||||||||||||||||||||||||||||
Income taxes | 29,092 | 25,041 | (3,703 | ) | 18,293 | 9,408 | 12,685 | 6,520 | |||||||||||||||||||||
Interest expense(1) | 57,793 | 54,163 | 12,562 | 58,149 | 84,082 | 109,328 | 168,051 | ||||||||||||||||||||||
Other (income) expense | 3,150 | 8,970 | 765 | 5,020 | (4,581 | ) | 4,515 | 4,556 | |||||||||||||||||||||
Cumulative effect of a change in accounting principle, net of taxes | 3,390 | — | — | — | — | — | — | ||||||||||||||||||||||
(Income) loss from discontinued operations, net of taxes | 1,542 | 2,740 | 1,565 | (4,155 | ) | — | — | — | |||||||||||||||||||||
Depreciation and amortization | 66,583 | 65,085 | 16,865 | 58,266 | 81,952 | 95,821 | 137,745 | ||||||||||||||||||||||
Amortization of net favorable leases | — | — | 3,087 | 4,174 | 3,649 | 3,671 | |||||||||||||||||||||||
Amortization of tenant allowances | — | — | — | — | — | — | (1,303 | ) | |||||||||||||||||||||
Impairment of long-lived assets | 3,869 | 5,049 | 1,000 | 36,721 | 51,677 | 28,537 | 28,943 | ||||||||||||||||||||||
(Gain) loss on sale of assets and other | 470 | (1,202 | ) | (513 | ) | 3,602 | 4,436 | 7,645 | 7,706 | ||||||||||||||||||||
Deferred lease expenses | 3,802 | 4,547 | 560 | 3,336 | 4,395 | 5,730 | 5,159 | ||||||||||||||||||||||
Stock option compensation and change of control expenses related to the MDP Merger | — | — | 31,995 | — | — | — | — | ||||||||||||||||||||||
Amortized compensation — stock options | 1,103 | 1,080 | 145 | — | — | 2,864 | 2,864 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 206,270 | $ | 210,122 | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | $ | 360,364 | |||||||||||||||
Adjusted EBITDA margin | 22.0 | % | 22.1 | % | 21.7 | % | 22.6 | % | 20.6 | % | 22.3 | % | 22.4 | % |
(1) | Includes amortization of debt issue costs. |
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Century | Adjustments | |||||||||||||||||||
Cinemark | Century | Stub | to Reflect Century | |||||||||||||||||
Historical(1) | Historical(2) | Period(3) | Acquisition | Pro Forma | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
REVENUES | ||||||||||||||||||||
Admissions | $ | 760,275 | $ | 264,902 | $ | 4,704 | $ | — | $ | 1,029,881 | ||||||||||
Concession | 375,798 | 109,641 | 1,977 | — | 487,416 | |||||||||||||||
Other | 84,521 | 10,161 | 125 | — | 94,807 | |||||||||||||||
Total revenues | 1,220,594 | 384,704 | 6,806 | — | 1,612,104 | |||||||||||||||
COST OF OPERATIONS | ||||||||||||||||||||
Film rentals and advertising | 405,987 | 137,711 | 2,446 | — | 546,144 | |||||||||||||||
Concession supplies | 59,020 | 16,043 | 296 | — | 75,359 | |||||||||||||||
Salaries and wages | 118,616 | 41,216 | 857 | — | 160,689 | |||||||||||||||
Facility lease expense | 161,374 | 44,733 | 843 | — | 206,950 | |||||||||||||||
Utilities and other | 144,808 | 39,226 | 665 | — | 184,699 | |||||||||||||||
General and administrative expenses | 67,768 | 32,271 | 252 | (15,672 | )(6) | 84,619 | ||||||||||||||
Depreciation and amortization | 95,821 | 36,200 | 795 | 4,929 | (4) | 137,745 | ||||||||||||||
Amortization of net favorable leases | 3,649 | — | — | 22 | (5) | 3,671 | ||||||||||||||
Impairment of long-lived assets | 28,537 | 406 | — | — | 28,943 | |||||||||||||||
Loss on sale of assets and other | 7,645 | 61 | — | — | 7,706 | |||||||||||||||
Total cost of operations | 1,093,225 | 347,867 | 6,154 | (10,721 | ) | 1,436,525 | ||||||||||||||
OPERATING INCOME | 127,369 | 36,837 | 652 | 10,721 | 175,579 | |||||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||
Interest expense | (105,986 | ) | (26,033 | ) | (617 | ) | (29,392 | )(7) | (162,028 | ) | ||||||||||
Amortization of debt issue costs | (3,342 | ) | (454 | ) | (14 | ) | (2,213 | )(7) | (6,023 | ) | ||||||||||
Interest income | 7,040 | 567 | — | — | 7,607 | |||||||||||||||
Other income (expense) | (11,555 | ) | (609 | ) | 1 | — | (12,163 | ) | ||||||||||||
Total other expenses | (113,843 | ) | (26,529 | ) | (630 | ) | (31,605 | ) | (172,607 | ) | ||||||||||
INCOME BEFORE INCOME TAXES | 13,526 | 10,308 | 22 | (20,884 | ) | 2,972 | ||||||||||||||
Income taxes | 12,685 | 4,376 | — | (10,541 | )(8) | 6,520 | ||||||||||||||
NET INCOME (LOSS) | $ | 841 | $ | 5,932 | $ | 22 | $ | (10,343 | ) | $ | (3,548 | ) | ||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||||||||
Basic | 28,713 | 31,284 | ||||||||||||||||||
Diluted | 29,278 | 31,284 | ||||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.03 | $ | (0.11 | ) | |||||||||||||||
Diluted earnings (loss) per share | $ | 0.03 | $ | (0.11 | ) | |||||||||||||||
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(1) | Cinemark historical results include the results of operations of Century Theatres from October 5, 2006 to December 31, 2006. |
(2) | Century historical results include the results of operations of Century Theatres from December 29, 2005 to September 28, 2006. |
(3) | Century stub period results include the results of operations of Century Theatres from September 29, 2006 to October 4, 2006 (the period prior to the Century Acquisition). |
(4) | Reflects the depreciation related to the increase in theatre property and equipment to fair value pursuant to purchase accounting for the Century acquisition. |
(5) | Reflects the amortization associated with intangible assets recorded pursuant to the purchase method of accounting for the Century acquisition as follows: |
Amount | Amortization Period | |||||
Goodwill | $ | 602,695 | Indefinite life | |||
Tradenames | 136,000 | Indefinite life | ||||
Net unfavorable leases | (5,600 | ) | Remaining term of the lease commitments ranging from one to thirty years |
(6) | To give effect to the elimination of change of control payments to Century’s management. |
(7) | Reflects interest expense and amortization of debt issuance costs resulting from the changes to our debt structure: |
Interest expense recorded on the Cinemark USA, Inc.’s existing term loan | $ | (13,879 | ) | |
Interest expense recorded on Century’s existing credit facility | (18,217 | ) | ||
Interest expense on the new $1,120,000 term loan(a) | 61,488 | |||
Interest expense | $ | 29,392 | ||
(a) | Reflects estimated interest rate of 7.32% (the initial LIBOR borrowing rate) on the new senior credit facility for the period January 1, 2006 to October 4, 2006, the period in 2006 during which the new senior secured credit facility was not in effect. |
Amortization of debt issue costs on Cinemark USA, Inc.’s existing term loan | $ | (179 | ) | |
Amortization of debt issue costs on Century’s existing credit facility | (454 | ) | ||
Amortization of debt issue costs on the new $1,120,000 term loan(a) | 2,846 | |||
Amortization of debt issue costs | $ | 2,213 | ||
(a) | Reflects debt issue costs on the new senior secured credit facility for the period January 1, 2006 to October 4, 2006, the period in 2006 during which the new senior secured credit facility was not in effect. |
(8) | To reflect the tax effect of the pro forma adjustments at our statutory income tax rate of 39%. |
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AND RESULTS OF OPERATIONS
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• | actual theatre level cash flows; | |
• | future years budgeted theatre level cash flows; | |
• | theatre property and equipment carrying values; |
• | goodwill carrying values; |
• | amortizing intangible asset carrying values; |
• | the age of a recently built theatre; |
• | competitive theatres in the marketplace; |
• | changes in foreign currency exchange rates; | |
• | the impact of recent ticket price changes; | |
• | available lease renewal options; and | |
• | other factors considered relevant in our assessment of impairment of individual theatre assets. |
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Year Ended December 31, | ||||||||||||
2004 | 2005 | 2006 | ||||||||||
Operating data (in millions)(1): | ||||||||||||
Revenues | ||||||||||||
Admissions | $ | 647.0 | $ | 641.2 | $ | 760.3 | ||||||
Concession | 321.6 | 320.1 | 375.8 | |||||||||
Other | 55.6 | 59.3 | 84.5 | |||||||||
Total revenues | $ | 1,024.2 | $ | 1,020.6 | $ | 1,220.6 | ||||||
Theatre operating costs(2)(3) | ||||||||||||
Film rentals and advertising | $ | 348.8 | $ | 347.7 | $ | 406.0 | ||||||
Concession supplies | 53.8 | 52.5 | 59.0 | |||||||||
Salaries and wages | 103.1 | 101.5 | 118.6 | |||||||||
Facility lease expense | 128.7 | 138.5 | 161.4 | |||||||||
Utilities and other | 113.0 | 123.8 | 144.8 | |||||||||
Total theatre operating costs | $ | 747.4 | $ | 764.0 | $ | 889.8 | ||||||
Operating data as a percentage of total revenues(1): | ||||||||||||
Revenues | ||||||||||||
Admissions | 63.2 | % | 62.8 | % | 62.3 | % | ||||||
Concession | 31.4 | 31.4 | 30.8 | % | ||||||||
Other | 5.4 | 5.8 | 6.9 | % | ||||||||
Total revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Theatre operating costs(2)(3) | ||||||||||||
Film rentals and advertising | 53.9 | % | 54.2 | % | 53.4 | % | ||||||
Concession supplies | 16.7 | 16.4 | 15.7 | |||||||||
Salaries and wages | 10.1 | 9.9 | 9.7 | |||||||||
Facility lease expense | 12.6 | 13.6 | 13.2 | |||||||||
Utilities and other | 11.0 | 12.1 | 11.9 | |||||||||
Total theatre operating costs | 73.0 | % | 74.9 | % | 72.9 | % | ||||||
Average screen count (month end average)(1) | 3,135 | 3,239 | 3,628 | |||||||||
Revenues per average screen(1) | $ | 326,664 | $ | 315,104 | $ | 336,437 | ||||||
(1) | Results exclude our two United Kingdom theatres and our eleven Interstate theatres sold during 2004. The results of operations for these theatres are presented as discontinued operations for 2004. |
(2) | All costs are expressed as a percentage of total revenues, except film rentals and advertising, which are expressed as a percentage of admissions revenues, and concession supplies, which are expressed as a percentage of concession revenues. |
(3) | Excludes depreciation and amortization expense. |
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U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||
Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||
2005 | 2006 | % Change | 2005 | 2006 | % Change | 2005 | 2006 | % Change | ||||||||||||||||||||||||||||
Admissions revenues (in millions) | $ | 472.0 | $ | 577.9 | 22.4 | % | $ | 169.2 | $ | 182.4 | 7.8 | % | $ | 641.2 | $ | 760.3 | 18.6 | % | ||||||||||||||||||
Concession revenues (in millions) | $ | 248.7 | $ | 297.4 | 19.6 | % | $ | 71.4 | $ | 78.4 | 9.8 | % | $ | 320.1 | $ | 375.8 | 17.4 | % | ||||||||||||||||||
Other revenues (in millions)(1) | $ | 35.6 | $ | 59.4 | 66.9 | % | $ | 23.7 | $ | 25.1 | 5.9 | % | $ | 59.3 | $ | 84.5 | 42.5 | % | ||||||||||||||||||
Total revenues (in millions)(1) | $ | 756.3 | $ | 934.7 | 23.6 | % | $ | 264.3 | $ | 285.9 | 8.2 | % | $ | 1,020.6 | $ | 1,220.6 | 19.6 | % | ||||||||||||||||||
Attendance (in millions) | 105.6 | 118.7 | 12.4 | % | 60.1 | $ | 59.6 | (1.0 | )% | 165.7 | 178.3 | 7.6 | % | |||||||||||||||||||||||
Revenues per screen(1) | $ | 321,833 | $ | 346,812 | 7.8 | % | $ | 297,316 | $ | 306,459 | 3.1 | % | $ | 315,104 | $ | 336,437 | 6.8 | % |
(1) | U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See note 20 to our consolidated financial statements. |
• | Consolidated. The increase in admissions revenues of $119.1 million was attributable to a 7.6% increase in attendance from 165.7 million patrons for 2005 to 178.3 million patrons for 2006, which contributed $57.2 million, and a 10.2% increase in average ticket price from $3.87 for 2005 to $4.26 for 2006, which contributed $61.9 million. This increase included additional admissions revenues for the 77 Century theatres acquired during the fourth quarter of 2006. The increase in concession revenues of $55.7 million was attributable to the 7.6% increase in attendance, which contributed $30.3 million, and a 9.1% increase in concession revenues per patron from $1.93 for 2005 to $2.11 for the 2006, which contributed $25.4 million. This increase included additional concession revenues for the 77 Century theatres acquired during the fourth quarter. The increase in attendance was attributable to the additional attendance from the 77 Century theatres acquired, the solid slate of films released during 2006 and new theatre openings. The increases in average ticket price and concession revenues per patron were due to the higher ticket price structure at the 77 Century theatres acquired, price increases and favorable exchange rates in certain countries in which we operate. The 42.5% increase in other revenues was primarily attributable to incremental screen advertising revenues resulting from our participation in the NCM joint venture. |
• | U.S. The increase in admissions revenues of $105.9 million was attributable to a 12.4% increase in attendance from 105.6 million patrons for 2005 to 118.7 million patrons for 2006, which contributed $58.7 million, and an 8.9% increase in average ticket price from $4.47 for 2005 to $4.87 for 2006, which contributed $47.2 million. This increase included additional admissions revenues for the 77 Century theatres acquired during the fourth quarter of 2006. The increase in concession revenues of $48.7 million was attributable to the 12.4% increase in attendance, which contributed $31.0 million, and a 6.3% increase in concession revenues per patron from $2.36 for 2005 to $2.51 for 2006, which contributed $17.7 million. This increase included additional concession revenues for the 77 Century theatres acquired during the fourth quarter. The increase in attendance was attributable to the additional attendance from the 77 Century theatres acquired, the solid slate of films released during 2006 and new theatre openings. The increases in average ticket price and concession revenues per patron were due to the higher ticket price structure at the 77 Century theatres acquired and price increases. The 66.9% increase in other revenues was primarily attributable to incremental screen advertising revenues resulting from our participation in the joint venture with NCM. |
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• | International. The increase in admissions revenues of $13.2 million was attributable to an 8.8% increase in average ticket price from $2.82 for 2005 to $3.06 for 2006, which contributed $14.7 million, partially offset by a 1.0% decrease in attendance, which contributed $(1.5) million. The decrease in attendance was due to increased competition in certain markets. The increase in concession revenues of $7.0 million was attributable to a 10.9% increase in concession revenues per patron from $1.19 for 2005 to $1.32 for 2006, which contributed $7.7 million, partially offset by the 1.0% decrease in attendance, which contributed $(0.7) million. The increases in average ticket price and concession revenues per patron were due to price increases and favorable exchange rates in certain countries in which we operate. |
U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||
Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||
2005 | 2006 | 2005 | 2006 | 2005 | 2006 | |||||||||||||||||||
Film rentals and advertising | $ | 263.7 | $ | 315.4 | $ | 84.0 | $ | 90.6 | $ | 347.7 | $ | 406.0 | ||||||||||||
Concession supplies | 34.5 | 38.7 | 18.0 | 20.3 | $ | 52.5 | $ | 59.0 | ||||||||||||||||
Salaries and wages | 80.8 | 95.8 | 20.7 | 22.8 | $ | 101.5 | $ | 118.6 | ||||||||||||||||
Facility lease expense | 97.7 | 117.0 | 40.8 | 44.4 | $ | 138.5 | $ | 161.4 | ||||||||||||||||
Utilities and other | 90.7 | 108.3 | 33.1 | 36.5 | $ | 123.8 | $ | 144.8 | ||||||||||||||||
Total theatre operating costs | $ | 567.4 | $ | 675.2 | $ | 196.6 | $ | 214.6 | $ | 764.0 | $ | 889.8 | ||||||||||||
• | Consolidated. Film rentals and advertising costs were $406.0 million, or 53.4% of admissions revenues, for 2006 compared to $347.7 million, or 54.2% of admissions revenues, for 2005. The increase in film rentals and advertising costs for 2006 of $58.3 million is due to increased admissions revenues, which contributed $65.7 million, and a decrease in our film rental and advertising rate, which contributed $(7.4) million. The decrease in film rentals and advertising costs as a percentage of admissions revenues was due to a more favorable mix of films resulting in lower average film rental rates in 2006 compared with 2005 which had certain blockbuster films with higher than average film rental rates. Concession supplies expense was $59.0 million, or 15.7% of concession revenues, for 2006 compared to $52.5 million, or 16.4% of concession revenues, for 2005. The increase in concession supplies expense of $6.5 million is primarily due to increased concession revenues, which contributed $8.5 million, and a decrease in our concession supplies rate, which contributed $(2.0) million. The decrease in concession supplies expense as a percentage of revenues was primarily due to concession sales price increases. |
• | U.S. Film rentals and advertising costs were $315.4 million, or 54.6% of admissions revenues, for 2006 compared to $263.7 million, or 55.9% of admissions revenues, for 2005. The increase in film rentals and advertising costs for 2006 of $51.7 million is due to increased admissions revenues, which |
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contributed $59.2 million, and a decrease in our film rentals and advertising rate, which contributed $(7.5) million. The decrease in film rentals and advertising costs as a percentage of admissions revenues was due to a more favorable mix of films resulting in lower average film rental rates in 2006 compared with 2005 which had certain blockbuster films with higher than average film rental rates. Concession supplies expense was $38.7 million, or 13.0% of concession revenues, for 2006 compared to $34.5 million, or 13.9% of concession revenues, for 2005. The increase in concession supplies expense of $4.2 million is due to increased concession revenues, which contributed $6.7 million, and a decrease in our concession supplies rate, which contributed $(2.5) million. The decrease in concession supplies expense as a percentage of revenues was primarily due to concession sales price increases. |
• | International. Film rentals and advertising costs were $90.6 million, or 49.7% of admissions revenues, for 2006 compared to $84.0 million, or 49.6% of admissions revenues, for 2005. The increase in film rentals and advertising costs for 2006 is primarily due to increased admissions revenues. Concession supplies expense was $20.3 million, or 25.9% of concession revenues, for 2006 compared to $18.0 million, or 25.2% of concession revenues, for 2005. The increase in concession supplies expense of $2.3 million is due to increased concession revenues, which contributed $1.8 million, and an increase in our concession supplies rate, which contributed $0.5 million. |
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U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||
Year Ended December 31, | % | Year Ended December 31, | % | Year Ended December 31, | % | |||||||||||||||||||||||||||||||
2004 | 2005 | Change | 2004 | 2005 | Change | 2004 | 2005 | Change | ||||||||||||||||||||||||||||
Admissions revenues (in millions) | $ | 489.0 | $ | 472.0 | (3.5 | )% | $ | 158.0 | $ | 169.2 | 7.1 | % | $ | 647.0 | $ | 641.2 | (0.9 | )% | ||||||||||||||||||
Concession revenues (in millions) | $ | 255.9 | $ | 248.7 | (2.8 | )% | $ | 65.7 | $ | 71.4 | 8.7 | % | $ | 321.6 | $ | 320.1 | (0.5 | )% | ||||||||||||||||||
Other revenues (in millions)(1) | $ | 37.1 | $ | 35.6 | (4.0 | )% | $ | 18.5 | $ | 23.7 | 28.1 | % | $ | 55.6 | $ | 59.3 | 6.7 | % | ||||||||||||||||||
Total revenues (in millions)(1) | $ | 782.0 | $ | 756.3 | (3.3 | )% | $ | 242.2 | $ | 264.3 | 9.1 | % | $ | 1,024.2 | $ | 1,020.6 | (0.4 | )% | ||||||||||||||||||
Attendance (in millions) | 113.6 | 105.6 | (7.1 | )% | 65.7 | 60.1 | (8.5 | )% | 179.3 | 165.7 | (7.6 | )% | ||||||||||||||||||||||||
Revenues per screen(1) | $ | 341,747 | $ | 321,833 | (5.8 | )% | $ | 286,364 | $ | 297,316 | 3.8 | % | $ | 326,664 | $ | 315,104 | (3.5 | )% |
(1) | U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See note 20 to our consolidated financial statements. |
• | Consolidated. The decrease in admissions revenues of $5.8 million was due to the 7.6% decline in attendance, which contributed $(48.1) million, partially offset by the 7.3% increase in average ticket prices, which contributed $42.3 million. The decline in concession revenues of $1.5 million was also attributable to the decline in attendance, which contributed $(23.7) million, partially offset by the 7.7% increase in concession revenues per patron, which contributed $22.2 million. The decline in attendance for 2005 was primarily due to the decline in the quality of films released during 2005 compared to 2004. The increases in average ticket prices and concession revenues per patron were |
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primarily due to price increases and also due to favorable exchange rates in certain countries in which we operate. |
• | U.S. The decrease in admissions revenues of $17.0 million was attributable to the 7.1% decrease in attendance from 113.6 million patrons for 2004 to 105.6 million patrons for 2005, which contributed $(34.7) million, partially offset by a 3.9% increase in average ticket price from $4.30 for 2004 to $4.47 for 2005, which contributed $17.7 million. The decline in concession revenues of $7.2 million was attributable to the 7.1% decrease in attendance, which contributed $(18.2) million, partially offset by a 4.6% increase in concession revenues per patron from $2.25 per patron for 2004 to $2.36 per patron for 2005, which contributed $11.0 million. The decline in attendance for 2005 was primarily due to the decline in the quality of films released during 2005 compared to 2004. The increases in average ticket prices and concession revenues per patron were primarily due to price increases. |
• | International. The increase in admissions revenues of $11.2 million was attributable to a 17.1% increase in average ticket price from $2.40 for 2004 to $2.82 for 2005, which contributed $24.6 million, partially offset by the 8.5% decrease in attendance from 65.7 million patrons for 2004 to 60.1 million patrons for 2005, which contributed $(13.4) million. The increase in concession revenues of $5.7 million was attributable to an 18.6% increase in concession revenues per patron from $1.00 per patron for 2004 to $1.19 per patron for 2005, which contributed $11.2 million, partially offset by the 8.5% decrease in attendance, which contributed $(5.5) million. The decline in attendance for 2005 was primarily due to the decline in the quality of films released during 2005 compared to 2004. The increases in average ticket prices and concession revenues per patron were primarily due to price increases and also favorable exchange rates in certain countries in which we operate. |
International | Consolidated | |||||||||||||||||||||||
U.S. Operating Segment | Operating Segment | Year Ended | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | December 31, | ||||||||||||||||||||||
2004 | 2005 | 2004 | 2005 | 2004 | 2005 | |||||||||||||||||||
Film rentals and advertising | $ | 270.1 | $ | 263.7 | $ | 78.7 | $ | 84.0 | $ | 348.8 | $ | 347.7 | ||||||||||||
Concession supplies | 37.2 | 34.5 | 16.6 | 18.0 | $ | 53.8 | $ | 52.5 | ||||||||||||||||
Salaries and wages | 84.9 | 80.8 | 18.2 | 20.7 | $ | 103.1 | $ | 101.5 | ||||||||||||||||
Facility lease expense | 93.7 | 97.7 | 35.0 | 40.8 | $ | 128.7 | $ | 138.5 | ||||||||||||||||
Utilities and other | 85.2 | 90.7 | 27.8 | 33.1 | $ | 113.0 | $ | 123.8 | ||||||||||||||||
Total theatre operating costs | $ | 571.1 | $ | 567.4 | $ | 176.3 | $ | 196.6 | $ | 747.4 | $ | 764.0 | ||||||||||||
• | Consolidated. Film rentals and advertising costs were $347.7 million, or 54.2% of admissions revenues, for 2005 compared to $348.8 million, or 53.9% of admissions revenues, for 2004. The $1.1 million decrease in film rentals and advertising costs for 2005 is due to decreased admissions revenues, which contributed $(3.8) million, offset by an increase in our film rentals and advertising rate, which contributed $2.7 million. The increase in film rentals and advertising costs as a percentage of admissions revenues was primarily related to the high film rental costs associated with certain blockbuster films released during 2005. Concession supplies expense was $52.5 million, or 16.4% of concession revenues, for 2005 compared to $53.8 million, or 16.7% of concession revenues, for 2004. The decrease in concession supplies expense of $1.3 million is primarily due to a decrease in our concession supplies rate. The decrease in concession supplies expense as a percentage of concession revenues was primarily due to concession sales price increases and an increase in concession rebates received from certain vendors. |
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• | U.S. Film rentals and advertising costs were $263.7 million, or 55.9% of admissions revenues, for 2005 compared to $270.1 million, or 55.2% of admissions revenues, for 2004. The decrease of $6.4 million in film rentals and advertising costs for 2005 is due to decreased admissions revenues, which contributed $(9.4) million, offset by an increase in our film rentals and advertising rate, which contributed $3.0 million. The increase in film rentals and advertising costs as a percentage of admissions revenues was due to high film rental costs associated with certain blockbuster films released during 2005. Concession supplies expense was $34.5 million, or 13.9% of concession revenues, for 2005 compared to $37.2 million, or 14.5% of concession revenues, for 2004. The decrease in concession supplies expense of $2.7 million is due to decreased concession revenues, which contributed $(1.0) million, and a decrease in our concession supplies rate, which contributed $(1.7) million. The decrease in concession supplies expense as a percentage of revenues was primarily due to concession sales price increases. |
• | International. Film rentals and advertising costs were $84.0 million, or 49.6% of admissions revenues, for 2005 compared to $78.7 million, or 49.8% of admissions revenues, for 2004. The increase in film rentals and advertising costs of $5.3 million for 2005 is primarily due to increased admissions revenues. Concession supplies expense was $18.0 million, or 25.2% of concession revenues, for 2005 compared to $16.6 million, or 25.3% of concession revenues, for 2004. The increase in concession supplies expense of $1.4 million is primarily due to increased concession revenues. |
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New | Existing | |||||||||||
Period | Theatres | Theatres | Total | |||||||||
Year Ended December 31, 2004 | $ | 61.5 | $ | 19.5 | $ | 81.0 | ||||||
Year Ended December 31, 2005 | $ | 50.3 | $ | 25.3 | $ | 75.6 | ||||||
Year Ended December 31, 2006 | $ | 68.8 | $ | 38.3 | $ | 107.1 |
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December 31, 2005 | December 31, 2006 | |||||||
Cinemark, Inc. 93/4% senior discount notes due 2014 | $ | 423,978 | $ | 434,073 | ||||
Cinemark USA, Inc. 9% senior subordinated notes due 2013 | 364,170 | 350,820 | ||||||
Cinemark USA, Inc. term loan | 255,450 | 1,117,200 | ||||||
Other long-term debt | 11,497 | 9,560 | ||||||
Total long-term debt | 1,055,095 | 1,911,653 | ||||||
Less current portion | 6,871 | 14,259 | ||||||
Long-term debt, less current portion | $ | 1,048,224 | $ | 1,897,394 | ||||
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Payments Due by Period | ||||||||||||||||||||
Less Than | After | |||||||||||||||||||
Total | One Year | 1-3 Years | 4-5 Years | 5 Years | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Long-term debt(1)(2) | $ | 2,013.2 | $ | 14.3 | $ | 27.7 | $ | 23.6 | $ | 1,947.6 | ||||||||||
Scheduled interest payments on long-term debt(3) | 953.4 | 112.6 | 237.2 | 322.6 | 281.0 | |||||||||||||||
Operating lease obligations | 2,004.2 | 163.7 | 334.7 | 320.1 | 1,185.7 | |||||||||||||||
Capital lease obligations | 115.8 | 3.6 | 8.7 | 10.4 | 93.1 | |||||||||||||||
Scheduled interest payments on capital leases | 119.0 | 12.4 | 23.5 | 21.4 | 61.7 | |||||||||||||||
Letters of credit | 0.1 | 0.1 | — | — | — | |||||||||||||||
Employment agreements | 9.3 | 3.1 | 6.2 | — | — | |||||||||||||||
Purchase commitments(4) | 162.7 | 78.1 | 71.6 | 12.5 | 0.5 | |||||||||||||||
�� | ||||||||||||||||||||
Total | $ | 5,377.7 | $ | 387.9 | $ | 709.6 | $ | 710.6 | $ | 3,569.6 | ||||||||||
(1) | Includes the 93/4% senior discount notes in the aggregate principal amount at maturity of $535.6 million. |
(2) | On March 6, 2007, we commenced a tender offer for any and all of our 9% senior subordinated notes, of which $332.2 million aggregate principal amount remains outstanding. See note 26 of our consolidated financial statements. |
(3) | Amounts include scheduled interest payments on fixed rate and variable rate debt agreements. Estimates for the variable rate interest payments were based on interest rates in effect on December 31, 2006. The average interest rates on our fixed rate and variable rate debt were 9.5% and 7.4%, respectively, as of December 31, 2006. |
(4) | Includes estimated remaining capital expenditures associated with the construction of new theatres to which we were committed as of December 31, 2006. |
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Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2004 | 2005 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Net Income (loss) | $ | (14,320 | ) | $ | (25,408 | ) | $ | 841 | ||||
Add (deduct): | ||||||||||||
Income taxes | 14,590 | 9,408 | 12,685 | |||||||||
Interest expense(1) | 70,711 | 84,082 | 109,328 | |||||||||
Other (income) expense | 5,785 | (4,581 | ) | 4,515 | ||||||||
Income (loss) from discontinued operations, net of taxes | (2,590 | ) | — | — | ||||||||
Depreciation and amortization | 75,131 | 81,952 | 95,821 | |||||||||
Amortization of net favorable leases | 3,087 | 4,174 | 3,649 | |||||||||
Amortization of tenant allowances | — | — | — | |||||||||
Impairment of long-lived assets | 37,721 | 51,677 | 28,537 | |||||||||
Gain (loss) on sale of assets and other | 3,089 | 4,436 | 7,645 | |||||||||
Deferred lease expenses | 3,896 | 4,395 | 5,730 | |||||||||
Stock option compensation and change of control expenses related to the MDP Merger | 31,995 | — | — | |||||||||
Amortized compensation — stock options | 145 | — | 2,864 | |||||||||
Adjusted EBITDA | $ | 229,240 | $ | 210,135 | $ | 271,615 | ||||||
(1) | Includes amortization of debt issue costs. |
Category | Moody’s | Standard and Poor’s | ||||||
Cinemark, Inc. 93/4% Senior Discount Notes | B3 | CCC+ | ||||||
Cinemark USA, Inc. Senior Secured Credit Facility | Ba2 | B | ||||||
Cinemark USA, Inc. 9% Senior Subordinated Notes | B2 | CCC+ |
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Expected Maturity as of December 31, 2006 | ||||||||||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
Fair | Interest | |||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | Value | Rate | ||||||||||||||||||||||||||||
Fixed rate | $ | 0.1 | $ | — | $ | — | $ | — | $ | — | $ | 886.4 | $ | 886.5 | $ | 812.1 | 9.5 | % | ||||||||||||||||||
Variable rate | 14.2 | 14.9 | 12.8 | 12.4 | 11.2 | 1,061.2 | 1,126.7 | 1,146.8 | 7.4 | % | ||||||||||||||||||||||||||
Total debt | $ | 14.3 | $ | 14.9 | $ | 12.8 | $ | 12.4 | $ | 11.2 | $ | 1,947.6 | $ | 2,013.2 | $ | 1,958.9 | ||||||||||||||||||||
Expected Maturity as of December 31, 2005 | ||||||||||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
Fair | Interest | |||||||||||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | Value | Rate | ||||||||||||||||||||||||||||
Fixed rate | $ | 0.1 | $ | — | $ | — | $ | — | $ | — | $ | 939.5 | $ | 939.6 | $ | 792.8 | 9.5 | % | ||||||||||||||||||
Variable rate | 6.8 | 5.5 | 4.3 | 4.1 | 185.1 | 61.1 | 266.9 | 268.4 | 6.6 | % | ||||||||||||||||||||||||||
Total debt | $ | 6.9 | $ | 5.5 | $ | 4.3 | $ | 4.1 | $ | 185.1 | $ | 1,000.6 | $ | 1,206.5 | $ | 1,061.2 | ||||||||||||||||||||
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• | Advertising: NCM develops, produces, sells and distributes a branded, pre-feature entertainment and advertising program called “FirstLook,” along with an advertising program for its LEN and various marketing and promotional products in theatre lobbies; | |
• | CineMeetings: NCM provides live and pre-recorded networked and single-site meetings and events in the theatres throughout its network; and |
• | Digital Programming Events: NCM distributes live and pre-recorded concerts, sporting events and other non-film entertainment programming to theatres across its digital network. |
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U.S. Box | Average | |||||||||||
Office | Ticket | |||||||||||
Year | Revenues | Attendance | Price | |||||||||
($ in millions) | (in millions) | |||||||||||
1996 | $ | 5,912 | 1,339 | $ | 4.42 | |||||||
1997 | $ | 6,366 | 1,388 | $ | 4.59 | |||||||
1998 | $ | 6,949 | 1,481 | $ | 4.69 | |||||||
1999 | $ | 7,448 | 1,465 | $ | 5.06 | |||||||
2000 | $ | 7,661 | 1,421 | $ | 5.39 | |||||||
2001 | $ | 8,413 | 1,487 | $ | 5.65 | |||||||
2002 | $ | 9,520 | 1,639 | $ | 5.80 | |||||||
2003 | $ | 9,489 | 1,574 | $ | 6.03 | |||||||
2004 | $ | 9,539 | 1,536 | $ | 6.21 | |||||||
2005 | $ | 8,991 | 1,403 | $ | 6.41 | |||||||
2006 | $ | 9,488 | 1,449 | $ | 6.55 |
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Total | Total | |||||||
State | Theatres | Screens | ||||||
Texas | 75 | 969 | ||||||
California | 64 | 729 | ||||||
Ohio | 19 | 207 | ||||||
Utah | 12 | 155 | ||||||
Nevada | 9 | 138 | ||||||
Colorado | 7 | 111 | ||||||
Illinois | 8 | 106 | ||||||
Arizona | 7 | 98 | ||||||
Kentucky | 7 | 83 | ||||||
Oregon | 6 | 82 | ||||||
Pennsylvania | 5 | 73 | ||||||
Louisiana | 5 | 68 | ||||||
Oklahoma | 6 | 67 | ||||||
New Mexico | 4 | 54 | ||||||
Virginia | 4 | 52 | ||||||
Michigan | 3 | 50 | ||||||
Indiana | 5 | 46 | ||||||
North Carolina | 4 | 41 | ||||||
Mississippi | 3 | 41 | ||||||
Florida | 2 | 40 | ||||||
Iowa | 4 | 39 | ||||||
Arkansas | 3 | 30 | ||||||
Georgia | 2 | 27 | ||||||
New York | 2 | 27 | ||||||
South Carolina | 2 | 22 | ||||||
Kansas | 1 | 20 | ||||||
Alaska | 1 | 16 | ||||||
New Jersey | 1 | 16 | ||||||
Missouri | 1 | 14 | ||||||
South Dakota | 1 | 14 | ||||||
Tennessee | 1 | 14 | ||||||
Wisconsin | 1 | 14 | ||||||
Massachusetts | 1 | 12 | ||||||
Delaware | 1 | 10 | ||||||
West Virginia | 1 | 10 | ||||||
Minnesota | 1 | 8 | ||||||
Montana | 1 | 8 | ||||||
Total United States | 280 | 3,511 | ||||||
Canada | 1 | 12 | ||||||
Total | 281 | 3,523 | ||||||
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Total | Total | |||||||
Country | Theatres | Screens | ||||||
Brazil | 36 | 311 | ||||||
Mexico | 30 | 293 | ||||||
Chile | 12 | 91 | ||||||
Central America(1) | 12 | 80 | ||||||
Argentina | 9 | 77 | ||||||
Colombia | 8 | 50 | ||||||
Ecuador | 4 | 26 | ||||||
Peru | 4 | 37 | ||||||
Total | 115 | 965 | ||||||
(1) | Includes Honduras, El Salvador, Nicaragua, Costa Rica and Panama. |
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• | Optimization of product mix. Concession products are primarily comprised of various sizes of popcorn, soft drinks and candy. Different varieties and flavors of candy and soft drinks are offered at theatres based on preferences in that particular geographic region. Specially priced combos are launched on a regular basis to increase average concession purchases as well as to attract new buyers. Kids’ meals are also offered and packaged towards younger patrons. |
• | Staff training. Employees are continually trained in “suggestive-selling” and “upselling” techniques. This training occurs through situational role-playing conducted at our “Customer Satisfaction University” as well as continuedon-the-job training. Consumer promotions conducted at the concession stand always include a motivational element which rewards theatre staff for exceptional combo sales during the period. |
• | Theatre design. Our theatres are designed to optimize efficiencies at the concession stands, which include multiple service stations to facilitate serving more customers quicker. We strategically place large concession stands within theatres to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands. Century’s concession areas are designed as individual stations which allow customers to select their choice of refreshments and proceed to the cash register. This design permits efficient service, enhanced choice and superior visibility of concession items. As we continue to integrate Century into our operations, we will evaluate this concession design against our historical design to determine the most optimum layout. | |
• | Cost control. We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain bulk rates. Concession supplies are distributed through a national distribution network. The concession distributor supplies and distributes inventory to the theatres, which place |
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volume orders directly with the vendors to replenish stock. The concession distributor is paid a percentage fee for warehousing and delivery of concession goods on a weekly basis. |
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• | location, accessibility and capacity of an exhibitor’s theatre; | |
• | theatre comfort; | |
• | quality of projection and sound equipment; | |
• | level of customer service; and | |
• | licensing terms. |
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Period from | Period from | ||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
to | to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Revenues(1) | |||||||||||||||||
U.S. and Canada | $ | 175,563 | $ | 607,831 | $ | 757,902 | $ | 936,684 | |||||||||
Mexico | 17,801 | 58,347 | 74,919 | 71,589 | |||||||||||||
Brazil | 21,775 | 69,097 | 112,182 | 128,555 | |||||||||||||
Other foreign countries | 18,889 | 56,311 | 77,213 | 85,710 | |||||||||||||
Eliminations | (403 | ) | (969 | ) | (1,619 | ) | (1,944 | ) | |||||||||
Total | $ | 233,625 | $ | 790,617 | $ | 1,020,597 | $ | 1,220,594 | |||||||||
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December 31, | December 31, | |||||||
2005 | 2006 | |||||||
(Successor) | (Successor) | |||||||
Theatre properties and equipment, net | ||||||||
U.S. and Canada | $ | 646,841 | $ | 1,169,456 | ||||
Mexico | 55,366 | 51,272 | ||||||
Brazil | 52,371 | 55,749 | ||||||
Other foreign countries | 48,691 | 48,095 | ||||||
Total | $ | 803,269 | $ | 1,324,572 | ||||
(1) | Revenues for all periods do not include results of the two United Kingdom theatres or the eleven Interstate theatres, which were sold during 2004, as the results of operations for these theatres are included as discontinued operations. |
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Name | Age | Position | ||||
Lee Roy Mitchell | 70 | Chairman of the Board; Director | ||||
Alan W. Stock | 46 | Chief Executive Officer | ||||
Timothy Warner | 62 | President; Chief Operating Officer | ||||
Tandy Mitchell | 56 | Executive Vice President; Assistant Secretary | ||||
Robert Copple | 48 | Executive Vice President; Treasurer; Chief Financial Officer; Assistant Secretary | ||||
Robert Carmony | 49 | Senior Vice President-Operations | ||||
Michael Cavalier | 40 | Senior Vice President-General Counsel; Secretary | ||||
Walter Hebert, III | 61 | Senior Vice President-Purchasing | ||||
Tom Owens | 50 | Senior Vice President-Real Estate | ||||
John Lundin | 57 | Vice President-Film Licensing | ||||
Don Harton | 49 | Vice President-Construction | ||||
Terrell Falk | 56 | Vice President-Marketing and Communications | ||||
Benjamin D. Chereskin | 48 | Director | ||||
James N. Perry, Jr. | 46 | Director | ||||
Robin P. Selati | 41 | Director | ||||
Vahe A. Dombalagian | 33 | Director | ||||
Enrique F. Senior | 63 | Director | ||||
Peter R. Ezersky | 46 | Director | ||||
Raymond W. Syufy | 44 | Director | ||||
Joseph E. Syufy | 41 | Director |
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Expiration | ||||||||
Class | Members | of Term | ||||||
Class I | ||||||||
Class II | ||||||||
Class III |
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• | assist the Board of Directors in its oversight responsibilities regarding (1) the integrity of our financial statements, (2) our risk management compliance with legal and regulatory requirements, (3) our system of internal controls regarding finance and accounting and (4) our accounting, auditing and financial reporting processes generally, including the qualifications, independence and performance of the independent auditor; | |
• | prepare the report required by the SEC for inclusion in our annual proxy or information statement; | |
• | appoint, retain, compensate, evaluate and terminate our independent accountants; | |
• | approve audit and non-audit services to be performed by the independent accountants; | |
• | establish procedures for the receipt, retention and treatment of complaints received by our company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and | |
• | perform such other functions as the Board of Directors may from time to time assign to the audit committee. |
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• | the allocation between long-term and currently paid out compensation; | |
• | the allocation between cash and non-cash compensation, and among different forms of non-cash compensation; | |
• | the allocation among each different form of long-term award; | |
• | how the determination is made as to when awards are granted, including awards of equity-based compensation such as options; and | |
• | stock ownership guidelines and any policies regarding hedging the economic risk of such ownership. |
Non-Equity | ||||||||||||||||||||||||
Incentive Plan | All Other | |||||||||||||||||||||||
Salary | Option Awards | Compensation | Compensation | Total | ||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($)(2) | ($) | ($) | ||||||||||||||||||
Lee Roy Mitchell | 2006 | $ | 763,958 | $ | — | $ | 385,773 | $ | 24,701 | (4) | $ | 1,174,432 | ||||||||||||
Chairman of the Board(3) | ||||||||||||||||||||||||
Alan W. Stock | 2006 | 452,097 | 415,761 | 227,698 | 634,180 | (5) | 1,729,736 | |||||||||||||||||
Chief Executive Officer(3) | ||||||||||||||||||||||||
Timothy Warner | 2006 | 366,616 | 415,761 | 184,645 | 14,772 | (6) | 981,794 | |||||||||||||||||
President and Chief Operating Officer(3) | ||||||||||||||||||||||||
Robert Copple | 2006 | 330,118 | 415,761 | 166,263 | 16,631 | (7) | 928,773 | |||||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||||||
Robert Carmony | 2006 | 318,247 | 270,244 | 160,284 | 15,578 | (8) | 764,353 | |||||||||||||||||
Senior Vice President — Operations |
(1) | These amounts represent the dollar amount of compensation cost we recognized during 2006 for awards granted during 2004 based on the grant date fair value of the named executive officer’s option awards in accordance with SFAS 123(R). See note 10 to our consolidated financial statements for assumptions used in determining compensation expense on options granted in accordance with SFAS 123R. |
(2) | Bonuses were earned in 2006 and paid in March 2007. |
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(3) | Effective December 12, 2006, Mr. Mitchell stepped down as our Chief Executive Officer. Mr. Stock was elected to replace Mr. Mitchell as our Chief Executive Officer. Mr. Mitchell will continue to serve as our Chairman of the Board of Directors. Mr. Stock had previously served as our President since March 1993 and as Chief Operating Officer since March 1992. Effective December 12, 2006, Mr. Warner was elected to replace Mr. Stock as our President and Chief Operating Officer. Mr. Warner had previously served as our Senior Vice President since May 2002 and President of Cinemark International, L.L.C. since April 1996. | |
(4) | Represents an $11,550 annual matching contribution to Mr. Mitchell’s 401(k) savings plan, $10,250 representing the value of the use of a company vehicle for one year and $2,901 of life insurance premiums and disability insurance paid by us for the benefit of Mr. Mitchell. | |
(5) | Represents an $11,550 annual matching contribution to Mr. Stock’s 401(k) savings plan, $3,793 of life insurance premiums and disability insurance paid by us for the benefit of Mr. Stock and payments of $618,837 under Mr. Stock’s profit participation agreement for certain of our theatres. | |
(6) | Represents an $11,550 annual matching contribution to Mr. Warner’s 401(k) savings plan and $3,222 of life insurance premiums and disability insurance paid by us for the benefit of Mr. Warner. | |
(7) | Represents an $11,550 annual matching contribution to Mr. Copple’s 401(k) savings plan and $5,081 of life insurance premiums and disability insurance paid by us for the benefit of Mr. Copple. | |
(8) | Represents an $11,550 annual matching contribution to Mr. Carmony’s 401(k) savings plan and $4,028 of life insurance premiums and disability insurance paid by us for the benefit of Mr. Carmony. |
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Option Awards | ||||||||||||||||
Number of | Number of | |||||||||||||||
Securities | Securities | |||||||||||||||
Underlying | Underlying | |||||||||||||||
Unexercised Options | Unexercised Options | Option | ||||||||||||||
(#) | (#) | Exercise Price | Option Expiration | |||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | ||||||||||||
Lee Roy Mitchell | — | — | — | — | ||||||||||||
Alan W. Stock | September 29, 2014 | |||||||||||||||
Timothy Warner | September 29, 2014 | |||||||||||||||
Robert Copple | September 29, 2014 | |||||||||||||||
Robert Carmony | September 29, 2014 |
Most Recent | Medical / | Other | Group | |||||||||||||||||||||||||
Salary | Bonus(1) | Dental | Life | Life | Disability(2) | Total | ||||||||||||||||||||||
Lee Roy Mitchell | $ | 763,958 | $ | 385,773 | $ | 4,864 | — | $ | 648 | $ | 2,253 | $ | 1,157,496 | |||||||||||||||
Alan W. Stock | 452,097 | 227,698 | 11,549 | — | 1,080 | 2,713 | 695,137 | |||||||||||||||||||||
Timothy Warner | 366,616 | 184,645 | 9,753 | — | 1,092 | 2,130 | 564,236 | |||||||||||||||||||||
Robert Copple | 330,118 | 166,263 | 11,549 | 890 | 1,071 | 3,120 | 513,011 | |||||||||||||||||||||
Robert Carmony | 318,247 | 160,284 | 4,864 | — | 1,080 | 2,948 | 487,423 |
(1) | Bonuses were earned in 2006 and paid in March 2007. |
(2) | Amounts for disability include long-term disability, individual disability income protection insurance and short-term disability. |
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Fees | ||||||||
Earned or | ||||||||
Paid in Cash | Total | |||||||
Name | ($) | ($) | ||||||
Benjamin D. Chereskin | — | — | ||||||
James N. Perry, Jr. | — | — | ||||||
Robin P. Selati | — | — | ||||||
Vahe A. Dombalagian | — | — | ||||||
Peter R. Ezersky | — | — | ||||||
Enrique F. Senior(1) | $ | 219,746 | $ | 219,746 | ||||
Raymond W. Syufy(2) | — | — | ||||||
Joseph E. Syufy(2) | — | — |
(1) | On January 19, 2007, we made a cash payment of $219,746 to Mr. Senior for his services on our Board of Directors from July 26, 2004 through December 31, 2006. |
(2) | Effective upon completion of the Century acquisition on October 5, 2006, we appointed Raymond W. Syufy and Joseph E. Syufy to our Board of Directors. |
• | for any breach of the director’s duty of loyalty to the company or its stockholders; | |
• | for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; |
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• | in respect of certain unlawful dividend payments or stock redemptions or repurchases; and | |
• | for any transaction from which the director derives an improper personal benefit. |
• | for a right of indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time; and | |
• | permit us to purchase and maintain insurance, at our expense, to protect us and any of our directors, officers and employees against any loss, whether or not we would have the power to indemnify that person against that loss under Delaware law. |
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• | each person known by us to beneficially hold five percent or more of our outstanding common stock; | |
• | each of our directors; | |
• | each of our named executive officers; | |
• | all of our executive officers and directors as a group; and | |
• | the selling stockholders. |
Shares to | ||||||||||||||||||||||||
Beneficial Ownership Prior to the Offering | be Sold in | Beneficial Ownership Immediately After the Offering | ||||||||||||||||||||||
Names of Beneficial Owner | Number | Percent | the Offering | Number | Percent | |||||||||||||||||||
5% Stockholders | ||||||||||||||||||||||||
Madison Dearborn Capital Partners IV, L.P.(1)(9) | 66.3 | % | % | |||||||||||||||||||||
Quadrangle Capital Partners LP(2) | 7.1 | % | % | |||||||||||||||||||||
Syufy Enterprises LP(3) | 10.8 | % | % | |||||||||||||||||||||
Directors and Named Executive Officers | ||||||||||||||||||||||||
Lee Roy Mitchell(4) | 14.2 | % | % | |||||||||||||||||||||
Alan W. Stock(5) | * | % | ||||||||||||||||||||||
Timothy Warner(6) | * | % | ||||||||||||||||||||||
Robert Copple(7) | * | % | ||||||||||||||||||||||
Robert Carmony(8) | * | % | ||||||||||||||||||||||
Benjamin D. Chereskin(9) | 66.3 | % | % | |||||||||||||||||||||
James N. Perry, Jr.(9) | 66.3 | % | % | |||||||||||||||||||||
Robin P. Selati(9) | 66.3 | % | % | |||||||||||||||||||||
Vahe A. Dombalagian(9) | 66.3 | % | % | |||||||||||||||||||||
Enrique F. Senior | — | % | ||||||||||||||||||||||
Peter R. Ezersky(10) | 7.1 | % | % | |||||||||||||||||||||
Raymond W. Syufy(11) | 10.8 | % | % | |||||||||||||||||||||
Joseph E. Syufy(11) | 10.8 | % | % | |||||||||||||||||||||
All directors and executive officers as a group (20 persons)(12) | 99.3 | % | % |
* | Represents less than 1% | |
(1) | Includes shares owned by Northwestern University, shares owned by John Madigan and shares owned by K&E Investment Partners, L.P. — 2004-B DIF. MDP has an irrevocable proxy to vote these shares in all matters subject to stockholder approval. The address of Madison Dearborn Capital Partners IV, L.P. is Three First National Plaza, Suite 3800, 70 West Madison Street, Chicago, Illinois 60602. |
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(2) | Includes shares owned by Quadrangle Select Partners LP, shares owned by Quadrangle Capital Partners A LP and shares owned by Quadrangle (Cinemark) Capital Partners LP. Quadrangle GP Investors LLC is the general partner of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the general partner of Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP and Quadrangle (Cinemark) Capital Partners LP. Quadrangle Capital Partners LP disclaims beneficial ownership of all shares held by Quadrangle Select Partners LP and Quadrangle Capital Partners A LP. The address of Quadrangle Capital Partners LP is c/o Quadrangle Group LLC, 375 Park Avenue, New York, New York 10152. | |
(3) | The address of Syufy Enterprises LP is 150 Pelican Way, San Rafael, California 94901. | |
(4) | Includes shares of common stock owned by the Mitchell Special Trust. Mr. Mitchell is the co-trustee of the Mitchell Special Trust. Mr. Mitchell expressly disclaims beneficial ownership of all shares held by the Mitchell Special Trust. Mr. Mitchell’s address is c/o Cinemark, Inc., 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. | |
(5) | Includes shares of common stock issuable upon the exercise of options that may be exercised within 60 days of the date hereof. | |
(6) | Includes shares of common stock issuable upon the exercise of options that may be exercised within 60 days of the date hereof. | |
(7) | Includes shares of common stock issuable upon the exercise of options that may be exercised within 60 days of the date hereof. | |
(8) | Includes shares of common stock issuable upon the exercise of options that may be exercised within 60 days of the date hereof. | |
(9) | The shares beneficially owned by MDCP IV may be deemed to be beneficially owned by Madison Dearborn Partners IV, L.P. (or MDP IV), the sole general partner of MDCP IV. John A. Canning, Jr., Paul J. Finnegan and Samuel M. Mencoff are the sole members of a limited partner committee of MDP IV that has the power, acting by majority vote, to vote or dispose of the shares beneficially held by MDCP IV. Messrs. Chereskin, Perry and Selati are each limited partners of MDP IV and Managing Directors and Members of Madison Dearborn Partners, LLC (the general partner of MDP IV), and therefore may be deemed to share beneficial ownership of the shares beneficially owned by MDCP IV. Mr. Dombalagian is a limited partner of MDP IV and a Director of Madison Dearborn Partners, LLC, and therefore may be deemed to share beneficial ownership of the shares beneficially owned by MDCP IV. Messrs. Canning, Finnegan, Mencoff, Chereskin, Perry, Selati and Dombalagian and MDP IV each hereby disclaims any beneficial ownership of any shares beneficially owned by MDCP IV. The address for each person named in this footnote is Three First National Plaza, Suite 3800, 70 West Madison Street, Chicago, Illinois 60602. | |
(10) | Mr. Ezersky is a Managing Member of Quadrangle GP Investors LLC, which is the general partner of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the general partner of Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP and Quadrangle (Cinemark) Capital Partners LP, and he may therefore be deemed to share beneficial ownership of the shares owned by Quadrangle Capital Partners LP, the shares owned by Quadrangle Select Partners LP, the shares owned by Quadrangle Capital Partners A LP and the shares owned by Quadrangle (Cinemark) Capital Partners LP. Mr. Ezersky expressly disclaims beneficial ownership of the shares owned by Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP and Quadrangle (Cinemark) Capital Partners LP. | |
(11) | Raymond Syufy and Joseph Syufy are executive officers of the general partner of Syufy Enterprises LP and they may therefore be deemed to share beneficial ownership of the shares owned by Syufy Enterprises LP. Raymond Syufy and Joseph Syufy expressly disclaim beneficial ownership of the shares owned by Syufy Enterprises LP. | |
(12) | Includes shares of common stock issuable upon the exercise of options that may be exercised within 60 days of the date hereof. |
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• | restricting dividends on the common stock; | |
• | diluting the voting power of the common stock; | |
• | impairing the liquidation rights of the common stock; | |
• | delaying or preventing a change in control without further action by the stockholders; or | |
• | decreasing the market price of common stock. |
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• | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”), | |
• | an affiliate of an interested stockholder, or | |
• | an associate of an interested stockholder, |
• | our Board of Directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of that transaction; | |
• | after the completion of the transaction that resulted in the stockholder becoming an “interested stockholder,” that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding shares owned by our officers and directors; or | |
• | on or subsequent to the date of the transaction, the business combination is approved by our Board of Directors and authorized at a meeting of our stockholders by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the “interested stockholder.” |
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• | 1% of the number of shares of our common stock then outstanding; or | |
• | the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a Form 144 with respect to such sale. |
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• | the obligation to purchase all of the shares of our common stock offered hereby (other than those shares of our common stock covered by their option to purchase additional shares as described below), if any of the shares are purchased; | |
• | the representations and warranties made by us and the selling stockholders to the underwriters are true; | |
• | there is no material change in our business or the financial markets; and | |
• | we deliver customary closing documents to the underwriter. |
Per Share | Total | |||||||||||||||
No Exercise | Full Exercise | No Exercise | Full Exercise | |||||||||||||
Paid by us | ||||||||||||||||
Paid by selling stockholders |
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• | during the last 17 days ofthe -day restricted period we issue an earnings release or material news or a material event relating to us occurs; or | |
• | prior to the expiration ofthe -day restricted period, we announce that we will release earnings results during the16-day period beginning on the last day ofthe -day period, |
• | the history and prospects for the industry in which we compete; | |
• | our financial information; | |
• | the ability of our management and our business potential and earning prospects; | |
• | the prevailing securities markets at the time of this offering; and | |
• | the recent market prices of, and the demand for, publicly traded shares of generally comparable companies. |
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• | Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. | |
• | A short position involves a sale by the underwriter of shares of our common stock in excess of the number of shares the underwriters are obligated to purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares of our common stock involved in the sales made by the underwriter in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares of our common stock involved is greater than the number of shares in their option to purchase additional shares. The underwriter may close out any short position by either exercising their option to purchase additional sharesand/or purchasing shares of our common stock in the open market. In determining the source of shares to close out the short position, the underwriter will consider, among other things, the price of shares of our common stock available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the shares of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. |
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(a) | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
(b) | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; |
(c) | to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or |
(d) | in any other circumstances falling within Article 3(2) of the Prospectus Directive, |
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(a) | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 or FSMA) received by it in connection with the issue or sale of shares of our common stock in circumstances in which Section 21(1) of the FSMA does not apply to us, and |
(b) | it has complied with, and will comply with all applicable provisions of the FSMA with respect to anything done by it in relating to shares of our common stock in, from or otherwise involving the United Kingdom. |
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Page | ||||
CINEMARK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS: | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
Schedule I — Condensed Financial Information of Registrant | F-49 | |||
CENTURY THEATRES, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS: | ||||
F-55 | ||||
F-56 | ||||
F-57 | ||||
F-58 | ||||
F-59 | ||||
F-60 |
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December 31, | December 31, | |||||||
2005 | 2006 | |||||||
(In thousands, except share data) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 182,199 | $ | 147,099 | ||||
Inventories | 4,546 | 6,058 | ||||||
Accounts receivable | 15,405 | 31,165 | �� | |||||
Income tax receivable | — | 8,946 | ||||||
Current deferred tax asset | — | 4,661 | ||||||
Prepaid expenses and other | 4,538 | 8,424 | ||||||
Total current assets | 206,688 | 206,353 | ||||||
THEATRE PROPERTIES AND EQUIPMENT | ||||||||
Land | 89,919 | 104,578 | ||||||
Buildings | 277,774 | 423,273 | ||||||
Property under capital lease | — | 143,776 | ||||||
Theatre furniture and equipment | 370,322 | 533,775 | ||||||
Leasehold interests and improvements | 354,347 | 513,191 | ||||||
Theatres under construction | 14,538 | 18,113 | ||||||
Total | 1,106,900 | 1,736,706 | ||||||
Less accumulated depreciation and amortization | 303,631 | 412,134 | ||||||
Theatre properties and equipment, net | 803,269 | 1,324,572 | ||||||
OTHER ASSETS | ||||||||
Goodwill | 551,537 | 1,205,423 | ||||||
Intangible assets — net | 246,181 | 360,752 | ||||||
Investments in and advances to affiliates | 11,193 | 11,390 | ||||||
Deferred charges and other assets — net | 45,984 | 63,092 | ||||||
Total other assets | 854,895 | 1,640,657 | ||||||
TOTAL ASSETS | $ | 1,864,852 | $ | 3,171,582 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion of long-term debt | $ | 6,871 | $ | 14,259 | ||||
Current portion of capital lease obligations | — | 3,649 | ||||||
Accounts payable | 47,234 | 47,272 | ||||||
Income tax payable | 13,144 | — | ||||||
Accrued film rentals | 21,441 | 47,862 | ||||||
Accrued interest | 15,333 | 23,706 | ||||||
Accrued payroll | 11,226 | 21,686 | ||||||
Accrued property taxes | 16,345 | 22,165 | ||||||
Accrued other current liabilities | 28,473 | 50,223 | ||||||
Total current liabilities | 160,067 | 230,822 | ||||||
LONG-TERM LIABILITIES | ||||||||
Long-term debt, less current portion | 1,048,224 | 1,897,394 | ||||||
Capital lease obligations, less current portion | — | 112,178 | ||||||
Deferred income taxes | 102,152 | 198,320 | ||||||
Deferred lease expenses | 9,569 | 14,286 | ||||||
Deferred revenues and other long-term liabilities | 9,069 | 12,672 | ||||||
Total long-term liabilities | 1,169,014 | 2,234,850 | ||||||
COMMITMENTS AND CONTINGENCIES (see Note 19) | — | — | ||||||
MINORITY INTERESTS IN SUBSIDIARIES | 16,422 | 16,613 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Class A common stock, $0.001 par value: 40,000,000 shares authorized, 27,896,316 shares issued and outstanding at December 31, 2005 and 31,286,338 shares issued and outstanding at December 31, 2006 | 28 | 31 | ||||||
Additionalpaid-in-capital | 532,599 | 685,495 | ||||||
Retained earnings (deficit) | (8,533 | ) | (7,692 | ) | ||||
Accumulated other comprehensive income (loss) | (4,745 | ) | 11,463 | |||||
Total stockholders’ equity | 519,349 | 689,297 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,864,852 | $ | 3,171,582 | ||||
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Period from | Period from | Year Ended | Year Ended | ||||||||||||||
January 1, 2004 to | April 2, 2004 to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
(In thousands) | |||||||||||||||||
REVENUES | |||||||||||||||||
Admissions | $ | 149,134 | $ | 497,865 | $ | 641,240 | $ | 760,275 | |||||||||
Concession | 72,480 | 249,141 | 320,072 | 375,798 | |||||||||||||
Other | 12,011 | 43,611 | 59,285 | 84,521 | |||||||||||||
Total revenues | 233,625 | 790,617 | 1,020,597 | 1,220,594 | |||||||||||||
COST OF OPERATIONS | |||||||||||||||||
Film rentals and advertising | 78,678 | 270,138 | 347,727 | 405,987 | |||||||||||||
Concession supplies | 11,989 | 41,772 | 52,507 | 59,020 | |||||||||||||
Salaries and wages | 23,989 | 79,095 | 101,431 | 118,616 | |||||||||||||
Facility lease expense | 30,915 | 97,829 | 138,477 | 161,374 | |||||||||||||
Utilities and other | 26,282 | 86,684 | 123,831 | 144,808 | |||||||||||||
General and administrative expenses | 11,869 | 39,803 | 50,884 | 67,768 | |||||||||||||
Stock option compensation and change of control expenses related to the MDP merger | 31,995 | — | — | — | |||||||||||||
Depreciation and amortization | 16,865 | 58,266 | 81,952 | 95,821 | |||||||||||||
Amortization of favorable leases | — | 3,087 | 4,174 | 3,649 | |||||||||||||
Impairment of long-lived assets | 1,000 | 36,721 | 51,677 | 28,537 | |||||||||||||
(Gain) loss on sale of assets and other | (513 | ) | 3,602 | 4,436 | 7,645 | ||||||||||||
Total cost of operations | 233,069 | 716,997 | 957,096 | 1,093,225 | |||||||||||||
OPERATING INCOME | 556 | 73,620 | 63,501 | 127,369 | |||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||
Interest expense | (11,972 | ) | (56,231 | ) | (81,342 | ) | (105,986 | ) | |||||||||
Amortization of debt issue costs | (590 | ) | (1,918 | ) | (2,740 | ) | (3,342 | ) | |||||||||
Interest income | 494 | 1,476 | 6,600 | 7,040 | |||||||||||||
Foreign currency exchange gain (loss) | 170 | (436 | ) | (1,276 | ) | (258 | ) | ||||||||||
Loss on early retirement of debt | — | (3,309 | ) | (46 | ) | (8,283 | ) | ||||||||||
Dividend income | — | — | — | 101 | |||||||||||||
Equity in income (loss) of affiliates | 37 | 136 | 227 | (1,646 | ) | ||||||||||||
Minority interests in income of subsidiaries | (1,466 | ) | (2,887 | ) | (924 | ) | (1,469 | ) | |||||||||
Total other expenses | (13,327 | ) | (63,169 | ) | (79,501 | ) | (113,843 | ) | |||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (12,771 | ) | 10,451 | (16,000 | ) | 13,526 | |||||||||||
Income taxes | (3,703 | ) | 18,293 | 9,408 | 12,685 | ||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS AFTER INCOME TAXES | (9,068 | ) | (7,842 | ) | (25,408 | ) | 841 | ||||||||||
Income (loss) from discontinued operations, net of taxes (See Note 7) | (1,565 | ) | 4,155 | — | — | ||||||||||||
NET INCOME (LOSS) | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | ||||||
EARNINGS PER SHARE — Basic/Diluted | |||||||||||||||||
Income (loss) from continuing operations after income taxes | $ | (0.22 | ) | $ | (0.28 | ) | $ | (0.91 | ) | $ | 0.03 | ||||||
Income (loss) from discontinued operations | (0.04 | ) | 0.15 | — | — | ||||||||||||
Net income (loss) | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | $ | 0.03 | ||||||
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)
PERIOD FROM JANUARY 1, 2004 TO APRIL 1, 2004 (PREDECESSOR), PERIOD FROM APRIL 2, 2004 TO DECEMBER 31, 2004 (SUCCESSOR), AND YEARS ENDED DECEMBER 31, 2005 (SUCCESSOR) AND 2006 (SUCCESSOR)
Class A | Class B | Accumulated | ||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | Additional | Unearned | Retained | Other | |||||||||||||||||||||||||||||||||||
Shares | Shares | Paid-in | Compensation | Earnings | Comprehensive | Comprehensive | ||||||||||||||||||||||||||||||||||
Issued | Amount | Issued | Amount | Capital | Stock Options | (Deficit) | Income (Loss) | Total | Income (Loss) | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Predecessor balance at December 31, 2003 | 19,664 | $ | 20 | 20,949 | $ | 21 | $ | 40,369 | $ | (1,740 | ) | $ | 124,821 | $ | (86,545 | ) | $ | 76,946 | ||||||||||||||||||||||
Net loss | (10,633 | ) | (10,633 | ) | (10,633 | ) | ||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | 145 | 145 | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 6 | 6 | 6 | |||||||||||||||||||||||||||||||||||||
Write-off of unearned compensation related to Madison Merger | 1,595 | 1,595 | ||||||||||||||||||||||||||||||||||||||
Predecessor balance at April 1, 2004 | 19,664 | $ | 20 | 20,949 | $ | 21 | $ | 40,369 | $ | — | $ | 114,188 | $ | (86,539 | ) | $ | 68,059 | $ | (10,627 | ) | ||||||||||||||||||||
MDP merger: | ||||||||||||||||||||||||||||||||||||||||
Management rollover | 4,727 | 5 | — | — | 9,459 | — | 20,562 | $ | (14,712 | ) | 15,314 | |||||||||||||||||||||||||||||
Issuance of stock to MDP | 22,948 | 23 | 518,222 | — | — | — | 518,245 | |||||||||||||||||||||||||||||||||
Net loss | (3,687 | ) | (3,687 | ) | (3,687 | ) | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 3,328 | 3,328 | 3,328 | |||||||||||||||||||||||||||||||||||||
Successor balance at December 31, 2004 | 27,675 | $ | 28 | — | $ | — | $ | 527,681 | $ | — | $ | 16,875 | $ | (11,384 | ) | $ | 533,200 | $ | (359 | ) | ||||||||||||||||||||
Net loss | (25,408 | ) | (25,408 | ) | (25,408 | ) | ||||||||||||||||||||||||||||||||||
Issuance of stock | 221 | — | 5,000 | 5,000 | ||||||||||||||||||||||||||||||||||||
Tax adjustment related to MDP merger fees | (82 | ) | (82 | ) | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 6,639 | 6,639 | 6,639 | |||||||||||||||||||||||||||||||||||||
Successor balance at December 31, 2005 | 27,896 | $ | 28 | — | $ | — | $ | 532,599 | $ | — | $ | (8,533 | ) | $ | (4,745 | ) | $ | 519,349 | $ | (18,769 | ) | |||||||||||||||||||
Net income | 841 | 841 | 841 | |||||||||||||||||||||||||||||||||||||
Issuance of stock — Century Acquisition | 3,388 | 3 | 149,997 | 150,000 | ||||||||||||||||||||||||||||||||||||
Exercise of stock options | 2 | — | 35 | 35 | ||||||||||||||||||||||||||||||||||||
Stock option compensation expense | 2,864 | 2,864 | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 16,208 | 16,208 | 16,208 | |||||||||||||||||||||||||||||||||||||
Successor balance at December 31, 2006 | 31,286 | $ | 31 | — | $ | — | $ | 685,495 | $ | — | $ | (7,692 | ) | $ | 11,463 | $ | 689,297 | $ | 17,049 | |||||||||||||||||||||
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Period from | Period from | Year Ended | |||||||||||||||
January 1, 2004 to | April 2, 2004 to | December 31, | |||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
(In thousands) | |||||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss) | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | ||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||||
Depreciation | 16,705 | 52,035 | 71,870 | 90,081 | |||||||||||||
Amortization of intangible and other assets | 160 | 9,318 | 14,256 | 9,389 | |||||||||||||
Amortization of long-term prepaid rents | 497 | 1,216 | 1,258 | 1,013 | |||||||||||||
Amortization of debt issue costs | 590 | 1,918 | 2,740 | 3,342 | |||||||||||||
Amortization of deferred revenues, deferred lease incentives and other | (146 | ) | (746 | ) | (660 | ) | (424 | ) | |||||||||
Amortization of debt premium | (366 | ) | (2,437 | ) | (3,105 | ) | (3,096 | ) | |||||||||
Impairment of long-lived assets | 1,000 | 36,721 | 51,677 | 28,537 | |||||||||||||
Stock option compensation expense | 145 | — | — | 2,864 | |||||||||||||
(Gain) loss on sale of assets and other | (513 | ) | 3,602 | 4,436 | 7,645 | ||||||||||||
Write-off unamortized debt issue costs and debt premium related to the early retirement of debt | — | (1,727 | ) | 46 | 5,811 | ||||||||||||
Write-off unearned compensation related to the MDP merger | — | 1,595 | — | — | |||||||||||||
Accretion of interest on senior discount notes | 96 | 26,635 | 38,549 | 40,425 | |||||||||||||
Deferred lease expenses | 63 | 2,120 | 3,137 | 4,717 | |||||||||||||
Deferred income tax expenses | (9,531 | ) | 16,924 | (12,332 | ) | (7,011 | ) | ||||||||||
Equity in (income) loss of affiliates | (37 | ) | (136 | ) | (227 | ) | 1,646 | ||||||||||
Minority interests in income of subsidiaries | 1,466 | 2,887 | 924 | 1,469 | |||||||||||||
Other | 1,869 | (2,791 | ) | 202 | — | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Inventories | 219 | (133 | ) | (309 | ) | 787 | |||||||||||
Accounts receivable | 1,769 | 1,931 | (4,102 | ) | (9,884 | ) | |||||||||||
Prepaid expenses and other | (780 | ) | 2,367 | (649 | ) | 1,678 | |||||||||||
Other assets | (3,255 | ) | (4,193 | ) | (12,373 | ) | (2,370 | ) | |||||||||
Advances with affiliates | (454 | ) | 508 | (121 | ) | (143 | ) | ||||||||||
Accounts payable and accrued liabilities | 11,254 | (19,254 | ) | 14,082 | 82 | ||||||||||||
Interest paid on repurchased senior discount notes | — | — | — | (5,381 | ) | ||||||||||||
Other long-term liabilities | 100 | 549 | 1,198 | 5,734 | |||||||||||||
Income tax receivable/payable | (118 | ) | (12,236 | ) | 20,181 | (22,090 | ) | ||||||||||
Net cash provided by operating activities | 10,100 | 112,986 | 165,270 | 155,662 | |||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||
Additions to theatre properties and equipment | (17,850 | ) | (63,158 | ) | (75,605 | ) | (107,081 | ) | |||||||||
Proceeds from sale of theatre properties and equipment | 262 | 12,683 | 1,317 | 6,446 | |||||||||||||
Acquisition of Century Theatres, Inc., net of cash acquired | — | — | — | (531,383 | ) | ||||||||||||
Purchase of shares in National CineMedia | — | — | (7,329 | ) | — | ||||||||||||
Purchase of minority partner shares in Cinemark Brasil | — | (44,958 | ) | — | — | ||||||||||||
Purchase of minority partner shares in Cinemark Mexico | — | (5,379 | ) | — | — | ||||||||||||
Other | 1,378 | 75 | — | 271 | |||||||||||||
Net cash used for investing activities | (16,210 | ) | (100,737 | ) | (81,617 | ) | (631,747 | ) | |||||||||
FINANCING ACTIVITIES | |||||||||||||||||
Issuance of common stock | — | — | 5,000 | 35 | |||||||||||||
Proceeds from MDP as a result of the merger | — | 518,245 | — | — | |||||||||||||
Net payments to stockholders, option holders and other payments related to the MDP merger | — | (835,704 | ) | — | — | ||||||||||||
Issuance of senior discount notes | 360,000 | — | — | — | |||||||||||||
Repurchase of senior discount notes | — | — | (1,302 | ) | (24,950 | ) | |||||||||||
Repurchase of senior subordinated notes | — | (122,750 | ) | — | (10,000 | ) | |||||||||||
Proceeds from new senior secured credit facility | — | — | — | 1,120,000 | |||||||||||||
Proceeds from other long-term debt | 692 | 290,754 | 660 | 2,330 | |||||||||||||
Payoff of long-term debt assumed in Century acquisition | — | — | — | (360,000 | ) | ||||||||||||
Payoff of former senior secured credit facility | — | (163,764 | ) | — | (253,500 | ) | |||||||||||
Repayments of other long-term debt | (2,267 | ) | (34,039 | ) | (6,671 | ) | (8,895 | ) | |||||||||
Payments on capital leases | — | — | — | (839 | ) | ||||||||||||
Debt issue costs | (10,491 | ) | (13,863 | ) | (239 | ) | (22,926 | ) | |||||||||
Other | (951 | ) | (305 | ) | (1,198 | ) | (1,278 | ) | |||||||||
Net cash provided by (used for) financing activities | 346,983 | (361,426 | ) | (3,750 | ) | 439,977 | |||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (45 | ) | 1,275 | 2,048 | 1,008 | ||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 340,828 | (347,902 | ) | 81,951 | (35,100 | ) | |||||||||||
CASH AND CASH EQUIVALENTS: | |||||||||||||||||
Beginning of period | 107,322 | 448,150 | 100,248 | 182,199 | |||||||||||||
End of period | $ | 448,150 | $ | 100,248 | $ | 182,199 | $ | 147,099 | |||||||||
SUPPLEMENTAL INFORMATION (see Note 17) |
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1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-7
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Category | Useful Life | |
Buildings on owned land | 40 years | |
Buildings on leased land | Lesser of lease term or useful life | |
Buildings under capital lease | Lesser of lease term or useful life | |
Theatre furniture and equipment | 5 to 15 years | |
Leasehold interests and improvements | Lesser of lease term or useful life |
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Intangible Asset | Amortization Method | |
Goodwill | Indefinite-lived | |
Tradename | Indefinite-lived | |
Capitalized licensing fees | Straight-line method over 15 years. The remaining terms of the underlying agreements range from 8 to 13 years. | |
Vendor contracts | Straight-line method over the terms of the underlying contracts. The remaining terms of the underlying contracts range from 1 to 16 years. | |
Net favorable leases | Based on the pattern in which the economic benefits are realized over the terms of the lease agreements. The remaining terms of the lease agreements range from 1 to 30 years. | |
Other intangible assets | Straight-line method over the terms of the underlying agreements. The remaining term of the underlying agreement is 12 years. |
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F-10
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Period from | Period from | ||||||||||||
January 1, 2004 | April 2, 2004 to | Year Ended | |||||||||||
to | December 31, | December 31, | |||||||||||
April 1, 2004 | 2004 | 2005 | |||||||||||
(Predecessor) | (Successor) | (Successor) | |||||||||||
Net loss as reported | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | ||||
Compensation expense included in reported net loss, net of tax(1) | 88 | — | — | ||||||||||
Compensation expense under fair-value method, net of tax | (162 | ) | (2,057 | ) | (2,964 | ) | |||||||
Pro-forma net loss | $ | (10,707 | ) | $ | (5,744 | ) | $ | (28,372 | ) | ||||
Basic and diluted loss per share | |||||||||||||
As reported | $ | (0.26 | ) | $ | (0.13 | ) | $ | (0.91 | ) | ||||
Pro-forma | $ | (0.26 | ) | $ | (0.21 | ) | $ | (1.02 | ) |
(1) | Amount included in net loss for the period from January 1, 2004 to April 1, 2004 excludes compensation expense of $16,245 related to the MDP Merger. |
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2. | NEW ACCOUNTING PRONOUNCEMENTS |
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3. | MERGER WITH MADISON DEARBORN PARTNERS AND RELATED REFINANCING OF CERTAIN LONG-TERM DEBT |
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Current assets | $ | 79,967 | ||
Fixed assets | 650,653 | |||
Goodwill | 620,540 | |||
Tradename | 173,882 | |||
Net favorable leases | 31,047 | |||
Vendor contracts | 52,012 | |||
Internally developed software | 1,626 | |||
Other long term assets | 42,384 | |||
Current liabilities | (90,940 | ) | ||
Other long term liabilities | (120,232 | ) | ||
Long-term debt | (922,694 | ) | ||
Total | $ | 518,245 | ||
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4. | ACQUISITION OF CENTURY THEATRES, INC. AND RELATED REFINANCING OF CERTAIN LONG-TERM DEBT |
Current assets(1) | $ | 32,635 | ||
Fixed assets | 519,053 | |||
Goodwill | 658,546 | |||
Tradename | 136,000 | |||
Other long term assets | 4,956 | |||
Net unfavorable leases | (9,360 | ) | ||
Current liabilities | (74,488 | ) | ||
Other long term liabilities | (218,669 | ) | ||
Total | $ | 1,048,673 | ||
(1) | Includes $7,290 of cash. |
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F-16
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Pro Forma | Pro Forma | |||||||
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2005 | 2006 | |||||||
(unaudited) | ||||||||
Revenues | ||||||||
Admissions | $ | 982,699 | $ | 1,029,881 | ||||
Concession | 457,190 | 487,416 | ||||||
Other | 74,559 | 94,807 | ||||||
Total revenues | $ | 1,514,448 | $ | 1,612,104 | ||||
Cost of operations | ||||||||
Film rentals and advertising | 526,002 | 546,144 | ||||||
Concession supplies | 72,631 | 75,359 | ||||||
Salaries and wages | 154,072 | 160,689 | ||||||
Facility lease expense | 194,394 | 206,950 | ||||||
Utilities and other | 169,507 | 184,699 | ||||||
General and administrative expenses(1) | 77,338 | 84,619 | ||||||
Depreciation and amortization(2)(3) | 140,994 | 141,416 | ||||||
Asset impairment loss | 51,677 | 28,943 | ||||||
Loss on sale of assets and other | 9,393 | 7,706 | ||||||
Total cost of operations | 1,396,008 | 1,436,525 | ||||||
Operating income | 118,440 | 175,579 | ||||||
Interest expense(4) | (162,131 | ) | (168,051 | ) | ||||
Other income (expense) | 6,105 | (4,556 | ) | |||||
Income (loss) before taxes | (37,586 | ) | 2,972 | |||||
Income taxes(5) | 2,176 | 6,520 | ||||||
Net loss | $ | (39,762 | ) | $ | (3,548 | ) | ||
Basic and diluted loss per share | $ | (1.28 | ) | $ | (0.11 | ) |
(1) | Gives effect to the elimination of change of control payments of $15,672 to Century’s management for the year ended December 31, 2006. |
(2) | Reflects increase in depreciation related to the fair value of the theatre properties and equipment pursuant to purchase accounting for the Century Acquisition. |
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(3) | Reflects the amortization associated with intangible assets recorded pursuant to purchase accounting for the Century Acquisition. |
(4) | Reflects interest expense and amortization of debt issue costs resulting from the changes to the Company’s debt structure pursuant to the Century Acquisition. |
(5) | Reflects the tax effect of the aforementioned proforma adjustments at the Company’s statutory income tax rate of 39%. |
5. | OTHER ACQUISITIONS |
Net favorable leases | $ | 730 | ||
Vendor contracts | 2,231 | |||
Goodwill | 23,962 | |||
Reduction of minority interest liability | 18,806 | |||
$ | 45,729 | |||
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Vendor contract | $ | 439 | ||
Net favorable leases | 480 | |||
Tradename | 1,179 | |||
Goodwill | 1,715 | |||
Reduction of minority interest liability | 1,566 | |||
$ | 5,379 | |||
6. | INVESTMENT IN NATIONAL CINEMEDIA LLC |
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7. | DISCONTINUED OPERATIONS |
Period from | Period from | ||||||||
January 1, 2004 to | April 2, 2004 to | ||||||||
April 1, 2004 | December 31, 2004 | ||||||||
(Predecessor) | (Successor) | ||||||||
Admissions | $ | 1,730 | $ | 3,163 | |||||
Concession | 1,285 | 4,056 | |||||||
Other | 326 | 811 | |||||||
Total revenues | $ | 3,341 | $ | 8,030 | |||||
Cost of operations | |||||||||
Film rentals and advertising | 757 | 1,434 | |||||||
Concession supplies | 262 | 643 | |||||||
Salaries and wages | 628 | 1,638 | |||||||
Facility lease expense | 608 | 1,076 | |||||||
Utilities and other | 634 | 1,581 | |||||||
General and administrative expenses | 277 | 220 | |||||||
Depreciation and amortization | 83 | 212 | |||||||
(Gain) loss on sale of assets and other | 1,800 | (3,057 | ) | ||||||
Total cost of operations | 5,049 | 3,747 | |||||||
Operating income (loss) | (1,708 | ) | 4,283 | ||||||
Minority interests in (income) loss of subsidiaries | 14 | (55 | ) | ||||||
Income (loss) before income taxes | (1,694 | ) | 4,228 | ||||||
Income taxes | (129 | ) | 73 | ||||||
Income (loss) from discontinued operations | $ | (1,565 | ) | $ | 4,155 | ||||
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8. | EARNINGS PER SHARE |
Period from | Period from | Year Ended | Year Ended | ||||||||||||||
January 1, 2004 to | April 2, 2004 to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Income (loss) from continuing operations after income taxes | $ | (9,068 | ) | $ | (7,842 | ) | $ | (25,408 | ) | $ | 841 | ||||||
Basic: | |||||||||||||||||
Weighted average common shares outstanding | 40,614 | 27,675 | 27,784 | 28,713 | |||||||||||||
Income (loss) from continuing operations after income taxes per common share | $ | (0.22 | ) | $ | (0.28 | ) | $ | (0.91 | ) | $ | 0.03 | ||||||
Diluted: | |||||||||||||||||
Weighted average common shares outstanding | 40,614 | 27,675 | 27,784 | 28,713 | |||||||||||||
Common equivalent shares for stock options | — | — | — | 565 | |||||||||||||
Weighted average common and common equivalent shares outstanding | 40,614 | 27,675 | 27,784 | 29,278 | |||||||||||||
Income (loss) from continuing operations after income taxes per common and common equivalent share | $ | (0.22 | ) | $ | (0.28 | ) | $ | (0.91 | ) | $ | 0.03 | ||||||
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9. | GOODWILL AND OTHER INTANGIBLE ASSETS — NET |
U.S. | International | |||||||||||
Operating | Operating | |||||||||||
Segment | Segment | Total | ||||||||||
Successor balance at December 31, 2004 | $ | 441,232 | $ | 169,724 | $ | 610,956 | ||||||
Impairment charges | (38,403 | ) | (6,898 | ) | (45,301 | ) | ||||||
Purchase from minority investors purchase price allocation adjustments | — | (5,059 | ) | (5,059 | ) | |||||||
Foreign currency translation adjustments and other | (1,432 | ) | (7,627 | ) | (9,059 | ) | ||||||
Successor balance at December 31, 2005 | $ | 401,397 | $ | 150,140 | $ | 551,537 | ||||||
Acquisition of Century Theatres, Inc. | 658,546 | — | 658,546 | |||||||||
Impairment charges | (5,116 | ) | (8,478 | ) | (13,594 | ) | ||||||
Foreign currency translation adjustments and other | 1,989 | 6,945 | 8,934 | |||||||||
Successor balance at December 31, 2006 | $ | 1,056,816 | $ | 148,607 | $ | 1,205,423 | ||||||
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Foreign | ||||||||||||||||||||||||
Currency | ||||||||||||||||||||||||
Balance at | Translation | Balance at | ||||||||||||||||||||||
December 31, | Adjustments and | December 31, | ||||||||||||||||||||||
2005 | Additions | Amortization | Impairment | Other | 2006 | |||||||||||||||||||
(Successor) | (Successor) | |||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Capitalized licensing fees: | ||||||||||||||||||||||||
Gross carrying amount | $ | 5,138 | $ | — | $ | — | $ | — | $ | — | $ | 5,138 | ||||||||||||
Accumulated amortization | (791 | ) | — | (348 | ) | — | — | (1,139 | ) | |||||||||||||||
Net carrying amount | $ | 4,347 | $ | — | $ | (348 | ) | $ | — | $ | — | $ | 3,999 | |||||||||||
Vendor contracts: | ||||||||||||||||||||||||
Gross carrying amount | 56,559 | — | — | — | (33 | ) | 56,526 | |||||||||||||||||
Accumulated amortization | (14,962 | ) | — | (4,962 | ) | — | — | (19,924 | ) | |||||||||||||||
Net carrying amount | $ | 41,597 | $ | — | $ | (4,962 | ) | $ | — | $ | (33 | ) | $ | 36,602 | ||||||||||
Net favorable leases: | ||||||||||||||||||||||||
Gross carrying amount | 32,677 | (9,360 | ) | — | — | (1,318 | ) | 21,999 | ||||||||||||||||
Accumulated amortization | (7,262 | ) | — | (3,427 | ) | (1,334 | ) | — | (12,023 | ) | ||||||||||||||
Net carrying amount | $ | 25,415 | $ | (9,360 | ) | $ | (3,427 | ) | $ | (1,334 | ) | $ | (1,318 | ) | $ | 9,976 | ||||||||
Other intangible assets: | ||||||||||||||||||||||||
Gross carrying amount | 1,663 | — | — | — | (1,593 | ) | 70 | |||||||||||||||||
Accumulated amortization | (557 | ) | — | (229 | ) | — | 770 | (16 | ) | |||||||||||||||
Net carrying amount | $ | 1,106 | $ | — | $ | (229 | ) | $ | — | $ | (823 | ) | $ | 54 | ||||||||||
Total net intangible assets with finite lives | $ | 72,465 | $ | (9,360 | ) | $ | (8,966 | ) | $ | (1,334 | ) | $ | (2,174 | ) | $ | 50,631 | ||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Tradename | 173,713 | 136,000 | — | — | 405 | 310,118 | ||||||||||||||||||
Other unamortized intangible assets | 3 | — | — | — | — | 3 | ||||||||||||||||||
Total intangible assets — net | $ | 246,181 | $ | 126,640 | $ | (8,966 | ) | $ | (1,334 | ) | $ | (1,769 | ) | $ | 360,752 | |||||||||
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For the year ended December 31, 2007 | $ | 7,066 | ||
For the year ended December 31, 2008 | 6,673 | |||
For the year ended December 31, 2009 | 5,832 | |||
For the year ended December 31, 2010 | 5,542 | |||
For the year ended December 31, 2011 | 4,937 | |||
Thereafter | 20,581 | |||
Total | $ | 50,631 | ||
10. | IMPAIRMENT OF LONG-LIVED ASSETS |
Period from | Period from | ||||||||||||||||
January 1, | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
2004 to | to December 31, | December 31, | December 31, | ||||||||||||||
April 1, 2004 | 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
United States theatre properties | $ | 1,000 | $ | 973 | $ | 5,626 | $ | 9,467 | |||||||||
International theatre properties | — | — | 750 | 4,142 | |||||||||||||
Subtotal | $ | 1,000 | $ | 973 | $ | 6,376 | $ | 13,609 | |||||||||
Intangible assets (see Note 9) | — | — | — | 1,334 | |||||||||||||
Goodwill (see Note 9) | — | 35,748 | 45,301 | 13,594 | |||||||||||||
Impairment of long-lived assets | $ | 1,000 | $ | 36,721 | $ | 51,677 | $ | 28,537 | |||||||||
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11. | DEFERRED CHARGES AND OTHER ASSETS — NET |
2005 | 2006 | |||||||
Debt issue costs | $ | 27,330 | $ | 39,646 | ||||
Less: Accumulated amortization | (5,218 | ) | (4,794 | ) | ||||
Subtotal | 22,112 | 34,852 | ||||||
Long-term prepaid rents | 11,782 | 16,283 | ||||||
Construction advances and other deposits | 2,026 | 1,869 | ||||||
Equipment to be placed in service | 3,744 | 3,990 | ||||||
Brazil value added tax deposit | 3,602 | 3,943 | ||||||
Other | 2,718 | 2,155 | ||||||
Total | $ | 45,984 | $ | 63,092 | ||||
12. | LONG-TERM DEBT |
2005 | 2006 | |||||||
Cinemark, Inc. 93/4% senior discount notes due 2014 | $ | 423,978 | $ | 434,073 | ||||
Cinemark USA, Inc. 9% senior subordinated notes due 2013 | 364,170 | 350,820 | ||||||
Cinemark USA, Inc. Term Loan | 255,450 | 1,117,200 | ||||||
Other long-term debt | 11,497 | 9,560 | ||||||
Total long-term debt | 1,055,095 | 1,911,653 | ||||||
Less current portion | 6,871 | 14,259 | ||||||
Long-term debt, less current portion | $ | 1,048,224 | $ | 1,897,394 | ||||
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F-27
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F-28
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F-29
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F-30
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2007 | $ | 14,259 | ||
2008 | 14,932 | |||
2009 | 12,803 | |||
2010 | 12,366 | |||
2011 | 11,200 | |||
Thereafter | 1,846,093 | |||
Total | $ | 1,911,653 | ||
13. | FOREIGN CURRENCY TRANSLATION |
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14. | INVESTMENTS IN AND ADVANCES TO AFFILIATES |
2005 | 2006 | |||||||
Investment in National CineMedia LLC — investment, at equity | $ | 7,329 | $ | 5,353 | ||||
Cinemark Theatres Alberta, Inc. — investment, at equity — 50% interest | 612 | 617 | ||||||
Fandango, Inc. — investment, at cost — 7% interest | 171 | 2,142 | ||||||
Cinemark — Core Pacific, Ltd. (Taiwan) — investment, at cost — 14% interest | 1,383 | 1,383 | ||||||
Other | 1,698 | 1,895 | ||||||
Total | $ | 11,193 | $ | 11,390 | ||||
15. | MINORITY INTERESTS IN SUBSIDIARIES |
2005 | 2006 | |||||||
Cinemark Partners II — 49.2% interest | $ | 8,554 | $ | 8,862 | ||||
Cinemark Equity Holdings Corp. (Central America) — 49.9% interest | 2,577 | 2,263 | ||||||
Cinemark Colombia, S.A. — 49.0% interest | 2,333 | 2,483 | ||||||
Greeley Ltd. — 49.0% interest | 1,491 | 1,422 | ||||||
Cinemark del Ecuador, S.A. — 40.0% interest | 932 | 994 | ||||||
Cinemark de Mexico, S.A. de C.V. — 0.6% interest | 272 | 346 | ||||||
Others | 263 | 243 | ||||||
Total | $ | 16,422 | $ | 16,613 | ||||
16. | CAPITAL STOCK |
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September 30, | January 28, | |||||||
2004 | 2005 | |||||||
Grant | Grant | |||||||
Expected life | 6.5 years | 6.5 years | ||||||
Expected volatility(1) | 39 | % | 44 | % | ||||
Risk-free interest rate | 3.79 | % | 3.93 | % | ||||
Dividend yield | 0 | % | 0 | % |
(1) | Expected volatility is based on historical volatility of the common stock price of comparable public companies. |
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2004 | 2005 | 2006 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
Outstanding at January 1 | — | $ | — | 2,361,590 | $ | 22.58 | 2,365,665 | $ | 22.58 | |||||||||||||||
Granted | 2,361,590 | (1) | $ | 22.58 | 4,075 | $ | 22.58 | — | $ | — | ||||||||||||||
Forfeited | — | $ | — | — | $ | — | (4,594 | ) | $ | 22.58 | ||||||||||||||
Exercised | — | $ | — | — | $ | — | (1,556 | ) | $ | 22.58 | ||||||||||||||
Outstanding at December 31 | 2,361,590 | $ | 22.58 | 2,365,665 | $ | 22.58 | 2,359,515 | $ | 22.58 | |||||||||||||||
Options exercisable at December 31 | 353,211 | $ | 22.58 | 827,603 | $ | 22.58 | 1,296,040 | $ | 22.58 | |||||||||||||||
(1) | Options granted on September 30, 2004, subsequent to change in accounting basis. |
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17. | SUPPLEMENTAL CASH FLOW INFORMATION |
Period from | |||||||||||||||||
Period from | April 2, | ||||||||||||||||
January 1, | 2004 to | Year Ended | Year Ended | ||||||||||||||
2004 to | December 31, | December 31, | December 31, | ||||||||||||||
April 1, 2004 | 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Cash paid for interest | $ | 23,307 | $ | 23,379 | $ | 45,166 | $ | 65,716 | |||||||||
Net cash paid for income taxes | $ | 5,070 | $ | 11,612 | $ | 2,911 | $ | 27,044 | |||||||||
Noncash investing and financing activities: | |||||||||||||||||
Change in construction lease obligations related to construction of theatres | $ | — | $ | 6,463 | $ | (4,312 | ) | $ | 395 | ||||||||
Changes in accounts payable and accrued expenses for the acquisition of theatre properties and equipment | $ | 1,609 | $ | (2,758 | ) | $ | 8,945 | $ | 3,662 | ||||||||
Exchange of theatre properties | $ | — | $ | — | $ | — | $ | 5,400 | |||||||||
Issuance of common stock as a result of the Century Acquisition | $ | — | $ | — | $ | — | $ | 150,000 |
18. | INCOME TAXES |
Period from | |||||||||||||||||
Period from | April 2, | ||||||||||||||||
January 1, | 2004 to | Year Ended | Year Ended | ||||||||||||||
2004 to | December 31, | December 31, | December 31, | ||||||||||||||
April 1, 2004 | 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||||||||
U.S. | $ | (26,030 | ) | $ | 3,312 | $ | (21,925 | ) | $ | 7,315 | |||||||
Foreign | 13,259 | 7,139 | 5,925 | 6,211 | |||||||||||||
Total | $ | (12,771 | ) | $ | 10,451 | $ | (16,000 | ) | $ | 13,526 | |||||||
Current: | |||||||||||||||||
Federal | $ | (5,668 | ) | $ | 8,397 | $ | 17,653 | $ | 19,280 | ||||||||
Foreign | 443 | 3,565 | 2,115 | 2,416 | |||||||||||||
State | (537 | ) | 997 | 1,972 | 868 | ||||||||||||
Total current expense | (5,762 | ) | 12,959 | 21,740 | 22,564 | ||||||||||||
Deferred: | |||||||||||||||||
Federal | 1,791 | 1,142 | (9,778 | ) | (14,532 | ) | |||||||||||
Foreign | — | 4,830 | 24 | 4,354 | |||||||||||||
State | 268 | (638 | ) | (2,578 | ) | 299 | |||||||||||
Total deferred expense | 2,059 | 5,334 | (12,332 | ) | (9,879 | ) | |||||||||||
Income tax expense | $ | (3,703 | ) | $ | 18,293 | $ | 9,408 | $ | 12,685 | ||||||||
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Period from | |||||||||||||||||
Period from | April 2, | ||||||||||||||||
January 1, | 2004 to | Year Ended | Year Ended | ||||||||||||||
2004 to | December 31, | December 31, | December 31, | ||||||||||||||
April 1, 2004 | 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Computed normal tax expense | $ | (4,470 | ) | $ | 3,658 | $ | (5,600 | ) | $ | 4,734 | |||||||
Goodwill | (11 | ) | 11,587 | 14,310 | 4,722 | ||||||||||||
Foreign inflation adjustments | 134 | 402 | (2,332 | ) | 1,803 | ||||||||||||
State and local income taxes, net of federal income tax benefit | (175 | ) | 348 | 1,030 | 759 | ||||||||||||
Foreign losses not benefited and other changes in valuation allowance | (800 | ) | (1,672 | ) | (448 | ) | 1,926 | ||||||||||
Foreign tax rate differential | 991 | 2,972 | (33 | ) | 946 | ||||||||||||
Foreign dividends including Section 965 | — | — | 3,158 | 578 | |||||||||||||
Other — net | 628 | 998 | (677 | ) | (2,783 | ) | |||||||||||
Income tax expense | $ | (3,703 | ) | $ | 18,293 | $ | 9,408 | $ | 12,685 | ||||||||
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2005 | 2006 | |||||||
Deferred liabilities: | ||||||||
Theatre properties and equipment | $ | 36,432 | $ | 125,950 | ||||
Deferred intercompany sale | 2,961 | 7,207 | ||||||
Intangible asset — contracts | 13,084 | 12,394 | ||||||
Intangible asset — tradenames | 63,627 | 117,019 | ||||||
Intangible asset — net favorable leases | 7,988 | 3,695 | ||||||
Total deferred liabilities | 124,092 | 266,265 | ||||||
Deferred assets: | ||||||||
Deferred lease expenses | 3,014 | 3,937 | ||||||
Theatre properties and equipment | 6,772 | 5,915 | ||||||
Deferred gain on sale leasebacks | 208 | — | ||||||
Property under capital lease | — | 44,477 | ||||||
Long-term debt | 3,435 | 7,598 | ||||||
Debt issue costs | 2,439 | 2,194 | ||||||
Tax loss carryforward | 13,549 | 15,535 | ||||||
AMT and other credit carryforwards | 2,159 | 2,583 | ||||||
Other expenses, not currently deductible for tax purposes | (2,701 | ) | (771 | ) | ||||
Total deferred assets | 28,875 | 81,468 | ||||||
Net long-term deferred income tax liability before valuation allowance | 95,217 | 184,797 | ||||||
Valuation allowance | 6,935 | 8,862 | ||||||
Net long-term deferred income tax liability | $ | 102,152 | $ | 193,659 | ||||
Net deferred tax liability — Foreign | $ | 8,035 | $ | 11,256 | ||||
Net deferred tax liability — U.S. | 94,117 | 182,403 | ||||||
Total of all deferrals | $ | 102,152 | $ | 193,659 | ||||
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19. | COMMITMENTS AND CONTINGENCIES |
Period from | Period from | ||||||||||||||||
January 1, | April 2, 2004 to | Year Ended | Year Ended | ||||||||||||||
2004 to | December 31, | December 31, | December 31, | ||||||||||||||
April 1, 2004 | 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Fixed rent expense | $ | 26,230 | $ | 78,724 | $ | 110,995 | $ | 130,726 | |||||||||
Contingent rent expense | 4,685 | 19,105 | 27,482 | 30,648 | |||||||||||||
Facility lease expense | 30,915 | 97,829 | 138,477 | 161,374 | |||||||||||||
Corporate office rent expense | 350 | 1,056 | 1,432 | 1,609 | |||||||||||||
Total rent expense | $ | 31,265 | $ | 98,885 | $ | 139,909 | $ | 162,983 | |||||||||
Operating | Capital | |||||||
Leases | Leases | |||||||
2007 | $ | 163,681 | $ | 16,062 | ||||
2008 | 168,123 | 16,092 | ||||||
2009 | 166,593 | 16,147 | ||||||
2010 | 162,273 | 16,401 | ||||||
2011 | 157,785 | 15,362 | ||||||
Thereafter | 1,185,739 | 154,783 | ||||||
Total | $ | 2,004,194 | $ | 234,847 | ||||
Amounts representing interest | (119,020 | ) | ||||||
Present value of future minimum payments | $ | 115,827 | ||||||
Current portion of capital lease obligations | 3,649 | |||||||
Capital lease obligations, less current portion | $ | 112,178 | ||||||
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20. | SEGMENTS |
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Period from | Period from | ||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
to | to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Revenues | |||||||||||||||||
U.S. | $ | 175,563 | $ | 607,831 | $ | 757,902 | $ | 936,684 | |||||||||
International | 58,465 | 183,755 | 264,314 | 285,854 | |||||||||||||
Eliminations | (403 | ) | (969 | ) | (1,619 | ) | (1,944 | ) | |||||||||
Total revenues | $ | 233,625 | $ | 790,617 | $ | 1,020,597 | $ | 1,220,594 | |||||||||
Period from | Period from | ||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
to | to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Adjusted EBITDA | |||||||||||||||||
U.S. | $ | 37,154 | $ | 139,583 | $ | 155,987 | $ | 217,845 | |||||||||
International | 13,454 | 39,049 | 54,148 | 53,770 | |||||||||||||
Total Adjusted EBITDA | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | |||||||||
December 31, | December 31, | |||||||
2005 | 2006 | |||||||
(Successor) | (Successor) | |||||||
(in thousands) | ||||||||
Capital Expenditures | ||||||||
U.S. | $ | 56,262 | $ | 80,786 | ||||
International | 19,343 | 26,295 | ||||||
Total Capital Expenditures | $ | 75,605 | $ | 107,081 | ||||
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Period from | Period from | ||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
to | to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Net income (loss) | $ | (10,633 | ) | $ | (3,687 | ) | $ | (25,408 | ) | $ | 841 | ||||||
Add (deduct): | |||||||||||||||||
Income taxes | (3,703 | ) | 18,293 | 9,408 | 12,685 | ||||||||||||
Interest expense(1) | 12,562 | 58,149 | 84,082 | 109,328 | |||||||||||||
Other (income) expense | 765 | 5,020 | (4,581 | ) | 4,515 | ||||||||||||
(Income) loss from discontinued operations, net of taxes | 1,565 | (4,155 | ) | — | — | ||||||||||||
Depreciation and amortization | 16,865 | 58,266 | 81,952 | 95,821 | |||||||||||||
Amortization of net favorable leases | — | 3,087 | 4,174 | 3,649 | |||||||||||||
Impairment of long-lived assets | 1,000 | 36,721 | 51,677 | 28,537 | |||||||||||||
(Gain) loss on sale of assets and other | (513 | ) | 3,602 | 4,436 | 7,645 | ||||||||||||
Deferred lease expenses | 560 | 3,336 | 4,395 | 5,730 | |||||||||||||
Stock option compensation and change of control expenses related to the MDP Merger | 31,995 | — | — | — | |||||||||||||
Amortized compensation-stock options | 145 | — | — | 2,864 | |||||||||||||
Adjusted EBITDA | $ | 50,608 | $ | 178,632 | $ | 210,135 | $ | 271,615 | |||||||||
(1) | Includes amortization of debt issue costs. |
Period from | Period from | ||||||||||||||||
January 1, 2004 | April 2, 2004 | Year Ended | Year Ended | ||||||||||||||
to | to | December 31, | December 31, | ||||||||||||||
April 1, 2004 | December 31, 2004 | 2005 | 2006 | ||||||||||||||
(Predecessor) | (Successor) | (Successor) | (Successor) | ||||||||||||||
Revenues(1) | |||||||||||||||||
U.S. and Canada | $ | 175,563 | $ | 607,831 | $ | 757,902 | $ | 936,684 | |||||||||
Mexico | 17,801 | 58,347 | 74,919 | 71,589 | |||||||||||||
Brazil | 21,775 | 69,097 | 112,182 | 128,555 | |||||||||||||
Other foreign countries | 18,889 | 56,311 | 77,213 | 85,710 | |||||||||||||
Eliminations | (403 | ) | (969 | ) | (1,619 | ) | (1,944 | ) | |||||||||
Total | $ | 233,625 | $ | 790,617 | $ | 1,020,597 | $ | 1,220,594 | |||||||||
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December 31, | December 31, | |||||||
2005 | 2006 | |||||||
(Successor) | (Successor) | |||||||
Theatre properties and equipment, net | ||||||||
U.S. and Canada | $ | 646,841 | $ | 1,169,456 | ||||
Mexico | 55,366 | 51,272 | ||||||
Brazil | 52,371 | 55,749 | ||||||
Other foreign countries | 48,691 | 48,095 | ||||||
Total | $ | 803,269 | $ | 1,324,572 | ||||
(1) | Revenues for all periods do not include results of the two United Kingdom theatres or the eleven Interstate theatres, which were sold during 2004, as the results of operations for these theatres are included as discontinued operations. |
21. | OTHER RELATED PARTY TRANSACTIONS |
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22. | VALUATION AND QUALIFYING ACCOUNTS |
Valuation Allowance | ||||
for Deferred | ||||
Tax Assets | ||||
Predecessor balance at December 31, 2003 | $ | 13,017 | ||
Additions | — | |||
Deductions | (800 | ) | ||
Predecessor balance at April 1, 2004 | $ | 12,217 | ||
Additions | 999 | |||
Deductions | (5,833 | ) | ||
Successor balance at December 31, 2004 | $ | 7,383 | ||
Additions | 2,232 | |||
Deductions | (2,680 | ) | ||
Successor balance at December 31, 2005 | $ | 6,935 | ||
Additions | 4,225 | |||
Deductions | (2,298 | ) | ||
Successor balance at December 31, 2006 | $ | 8,862 | ||
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23. | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
2005 (Successor) | ||||||||||||||||||||
First | Second | Third | Fourth | Full | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter(1) | Year | ||||||||||||||||
Revenues | $ | 237,681 | $ | 253,027 | $ | 256,300 | $ | 273,589 | $ | 1,020,597 | ||||||||||
Operating income (loss) | $ | 26,277 | $ | 28,043 | $ | 24,519 | $ | (15,338 | ) | $ | 63,501 | |||||||||
Net income (loss) | $ | 4,453 | $ | 5,865 | 2,260 | $ | (37,986 | ) | $ | (25,408 | ) | |||||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.21 | $ | 0.08 | $ | (1.37 | ) | $ | (0.91 | ) | ||||||||
Diluted | $ | 0.16 | $ | 0.21 | $ | 0.08 | $ | (1.37 | ) | $ | (0.91 | ) |
2006 (Successor) | ||||||||||||||||||||
First | Second | Third | Fourth | Full | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter(2)(3) | Year | ||||||||||||||||
Revenues | $ | 245,989 | $ | 295,105 | $ | 287,995 | $ | 391,505 | $ | 1,220,594 | ||||||||||
Operating income | $ | 24,574 | $ | 43,482 | $ | 30,131 | $ | 29,182 | $ | 127,369 | ||||||||||
Net income (loss) | $ | 5,790 | $ | 13,104 | $ | 2,276 | $ | (20,329 | ) | $ | 841 | |||||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.47 | $ | 0.08 | $ | (0.65 | ) | $ | 0.03 | |||||||||
Diluted | $ | 0.20 | $ | 0.46 | $ | 0.08 | $ | (0.65 | ) | $ | 0.03 |
(1) | During the fourth quarter of 2005, the Company recorded goodwill impairment charges of $45.3 million. |
(2) | During the fourth quarter of 2006, the Company acquired Century Theatres, Inc. (see Note 4). |
(3) | During the fourth quarter of 2006, the Company recorded goodwill impairment charges of $13.6 million and recorded additional interest expense related to the new senior secured credit facility. |
24. | SUBSEQUENT EVENT — NATIONAL CINEMEDIA |
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25. | SUBSEQUENT EVENT — DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC. |
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26. | SUBSEQUENT EVENT — LONG-TERM DEBT |
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December 31, | ||||
2006 | ||||
ASSETS | ||||
Cash and cash equivalents | $ | — | ||
Accounts receivable from affiliates | 35 | |||
Investment in subsidiaries | 674,935 | |||
$ | 674,970 | |||
LIABILITIES | $ | — | ||
STOCKHOLDERS’ EQUITY | ||||
Class A common stock, $0.001 par value: 40,000,000 shares authorized, 31,286,338 shares issued and outstanding | 31 | |||
Additional paid-in-capital | 682,631 | |||
Retained earnings (deficit) | (7,692 | ) | ||
Total stockholders’ equity | 674,970 | |||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 674,970 | ||
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For the Period From | ||||
October 5, 2006 to | ||||
December 31, 2006 | ||||
Revenues | $ | — | ||
Costs and expenses | — | |||
Equity losses of subsidiaries | (7,692 | ) | ||
Net loss | $ | (7,692 | ) | |
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Parent Company Statement of Stockholders’ Equity
For the Period from October 5, 2006 to December 31, 2006
(in thousands)
Class A | ||||||||||||||||||||
Common Stock | Additional | Retained | ||||||||||||||||||
Shares | Paid-in | Earnings | ||||||||||||||||||
Issued | Amount | Capital | (Deficit) | Total | ||||||||||||||||
Balance at October 5, 2006 | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Shares issued as a result of the Cinemark Share Exchange | 27,896 | 28 | 532,599 | — | 532,627 | |||||||||||||||
Shares issued as a result of the Century Acquisition | 3,388 | 3 | 149,997 | — | 150,000 | |||||||||||||||
Shares issued as a result of option exercises | 2 | — | 35 | — | 35 | |||||||||||||||
Net loss | — | — | — | (7,692 | ) | (7,692 | ) | |||||||||||||
Balance at December 31, 2006 | 31,286 | $ | 31 | $ | 682,631 | $ | (7,692 | ) | $ | 674,970 | ||||||||||
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For the Period From | ||||
October 5, 2006 to | ||||
December 31, 2006 | ||||
Net loss | $ | (7,692 | ) | |
OPERATING ACTIVITIES | ||||
Noncash items to reconcile net loss to cash flows from operating activities: | ||||
Equity loss in subsidiaries | 7,692 | |||
Net cash provided by operating activities | — | |||
INVESTING ACTIVITIES | ||||
Net cash used for investing activities | — | |||
FINANCING ACTIVITIES | ||||
Net cash used for financing activities | — | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | |||
CASH AND CASH EQUIVALENTS: | ||||
Beginning of period | — | |||
End of period | $ | — | ||
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1. | Basis of Presentation |
• | Cinemark USA, Inc., Century and Syufy Enterprises, LP (“Syufy”) entered into a definitive stock purchase agreement, dated August 7, 2006 (the “Purchase Agreement”), pursuant to which CUSA agreed to acquire approximately 77% of the issued and outstanding capital stock of Century. |
• | Syufy entered into a stock contribution and exchange agreement, dated August 7, 2006 (the “Contribution Agreement”), with Cinemark Holdings, pursuant to which Syufy has agreed to contribute the remaining shares of capital stock of Century to Cinemark Holdings, Inc. in exchange for shares of Cinemark Holdings, Inc. upon the consummation of the transactions contemplated by the Purchase Agreement. Of the total purchase price, $150,000 consisted of the issuance of shares of Class A common stock of Cinemark Holdings: |
• | The current stockholders of Cinemark, Inc. entered into a share exchange agreement (the “Exchange Agreement”) pursuant to which the stockholders agreed to, prior to the consummation of the transactions contemplated by the Purchase Agreement and the Contribution Agreement, exchange their shares of Class A common stock of Cinemark, Inc. for an equal number of shares of Class A common stock of Cinemark Holdings. |
2. | Long-Term Debt |
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3. | Capital Stock |
4. | Commitments and Contingencies |
F-54
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F-55
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2006 | 2005 | |||||||
(as restated, see Note 13) | ||||||||
(In thousands of dollars, | ||||||||
except share amounts) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 7,290 | $ | 43,518 | ||||
Other receivables, net of allowance of $25 each in 2006 and 2005 | 5,841 | 5,614 | ||||||
Inventories | 2,299 | 1,956 | ||||||
Prepaid expenses | 5,564 | 683 | ||||||
Deferred income tax assets | 10,602 | 4,320 | ||||||
Total current assets | 31,596 | 56,091 | ||||||
Property and equipment, net | 426,418 | 386,777 | ||||||
Deferred financing fees, net | 5,071 | 958 | ||||||
Other assets | 7,697 | 7,063 | ||||||
Total assets | $ | 470,782 | $ | 450,889 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES: | ||||||||
Current portion of long-term debt | $ | 3,600 | $ | 6,237 | ||||
Current portion of capital lease obligations | 4,002 | 2,125 | ||||||
Accounts payable | 24,760 | 16,222 | ||||||
Accrued film rentals, net | 9,923 | 16,580 | ||||||
Accrued expenses | 29,484 | 16,544 | ||||||
Deferred revenue | 3,070 | 4,919 | ||||||
Total current liabilities | 74,839 | 62,627 | ||||||
Deferred income tax liabilities | 3,071 | 7,886 | ||||||
Deferred rent | 28,604 | 29,169 | ||||||
Deferred lease incentives | 20,677 | 22,415 | ||||||
Long-term debt, net of current portion | 356,400 | 41,995 | ||||||
Capital lease obligations, net of current portion | 112,512 | 77,414 | ||||||
Other long-term liabilities | 444 | 406 | ||||||
Total liabilities | 596,547 | 241,912 | ||||||
Commitments and contingencies (Note 9) | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||
Common stock, no par value; 50,000,000 shares authorized: | ||||||||
7,829,063 and 10,000,000 shares issued and outstanding in 2006 and 2005 | 4,112 | 5,252 | ||||||
Retained earnings (deficit) | (131,367 | ) | 203,725 | |||||
Accumulated other comprehensive income | 1,490 | — | ||||||
Total stockholders’ equity (deficit) | (125,765 | ) | 208,977 | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 470,782 | $ | 450,889 | ||||
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2006 | 2005 | 2004 | ||||||||||
(as restated, see Note 13) | (as restated, see Note 13) | |||||||||||
(In thousands of dollars) | ||||||||||||
Revenues | ||||||||||||
Admissions | $ | 354,961 | $ | 338,760 | $ | 351,353 | ||||||
Concessions | 146,172 | 135,625 | 136,957 | |||||||||
Management fee from Syufy Enterprises, L.P. | 60 | 60 | 60 | |||||||||
Other | 14,801 | 14,202 | 10,447 | |||||||||
Total revenues | 515,994 | 488,647 | 498,817 | |||||||||
Expenses | ||||||||||||
Film rental | 184,837 | 177,491 | 181,896 | |||||||||
Concessions | 21,357 | 19,750 | 19,744 | |||||||||
Theatre operating expenses | 164,485 | 153,930 | 153,727 | |||||||||
General and administrative expenses | 37,849 | 26,765 | 32,284 | |||||||||
Depreciation and amortization | 47,522 | 49,500 | 45,930 | |||||||||
Total expenses | 456,050 | 427,436 | 433,581 | |||||||||
Income from operations | 59,944 | 61,211 | 65,236 | |||||||||
Interest expense | 29,367 | 13,081 | 11,713 | |||||||||
Other (income)/expense, net | (221 | ) | 3,564 | (935 | ) | |||||||
Income before provision for income taxes | 30,798 | 44,566 | 54,458 | |||||||||
Provision for income taxes | 12,674 | 17,310 | 21,216 | |||||||||
Net income | $ | 18,124 | $ | 27,256 | $ | 33,242 | ||||||
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Accumulated | ||||||||||||||||||||
Retained | Other | |||||||||||||||||||
Common Stock | Earnings | Comprehensive | ||||||||||||||||||
Shares | Amount | (Deficit) | Income | Total | ||||||||||||||||
(In thousands of dollars, except share amounts) | ||||||||||||||||||||
Balance, September 25, 2003 | 10,000,000 | $ | 5,252 | $ | 143,227 | $ | — | $ | 148,479 | |||||||||||
Net income and comprehensive income | — | — | 33,242 | — | 33,242 | |||||||||||||||
Balance, September 30, 2004 | 10,000,000 | 5,252 | 176,469 | — | 181,721 | |||||||||||||||
Net income and comprehensive income (as restated, see Note 13) | — | — | 27,256 | — | 27,256 | |||||||||||||||
Balance, September 29, 2005 (as restated, see Note 13) | 10,000,000 | 5,252 | 203,725 | — | 208,977 | |||||||||||||||
Redemption of common stock | (2,170,937 | ) | (1,140 | ) | (106,539 | ) | — | (107,679 | ) | |||||||||||
Dividends paid | — | — | (12,500 | ) | — | (12,500 | ) | |||||||||||||
Distribution in connection with refinancing (see Note 1) | — | — | (234,177 | ) | — | (234,177 | ) | |||||||||||||
Comprehensive income: | ||||||||||||||||||||
Fair value of interest rate swaps (net of tax of $987) | — | — | — | 1,490 | 1,490 | |||||||||||||||
Net income (as restated, see Note 13) | — | — | 18,124 | — | 18,124 | |||||||||||||||
Comprehensive income (as restated, see Note 13) | 19,614 | |||||||||||||||||||
Balance, September 28, 2006 | 7,829,063 | $ | 4,112 | $ | (131,367 | ) | $ | 1,490 | $ | (125,765 | ) | |||||||||
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2006 | 2005 | 2004 | ||||||||||
(as restated, | (as restated, | |||||||||||
see Note 13) | see Note 13) | |||||||||||
(In thousands of dollars) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 18,124 | $ | 27,256 | $ | 33,242 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 46,557 | 49,338 | 45,712 | |||||||||
Loss on disposal of assets | 61 | 4,967 | 110 | |||||||||
Impairment of investment | 852 | — | — | |||||||||
Deferred income taxes | (12,084 | ) | (2,359 | ) | 1,040 | |||||||
Amortization of deferred lease incentives | (1,738 | ) | (1,738 | ) | (1,734 | ) | ||||||
Amortization of loan fees | 1,419 | 162 | 218 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Other receivables | (227 | ) | 674 | (4,294 | ) | |||||||
Inventories | (343 | ) | 115 | (217 | ) | |||||||
Prepaid expenses | (4,881 | ) | (143 | ) | 41 | |||||||
Accounts payable | 8,538 | (19,664 | ) | 9,951 | ||||||||
Accrued film rentals, net | (6,657 | ) | 2,380 | (108 | ) | |||||||
Accrued expenses | 12,940 | (1,129 | ) | (8,505 | ) | |||||||
Deferred revenue | (1,849 | ) | (397 | ) | 1,674 | |||||||
Deferred rent | (565 | ) | 744 | 1,803 | ||||||||
Other long-term liabilities | 38 | 34 | 343 | |||||||||
Net cash provided by operating activities | 60,185 | 60,240 | 79,276 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (46,190 | ) | (23,427 | ) | (55,853 | ) | ||||||
Change in other assets, net | 305 | 178 | 65 | |||||||||
Net cash used for investing activities | (45,885 | ) | (23,249 | ) | (55,788 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Borrowings under line of credit | 15,000 | — | 23,850 | |||||||||
Repayment of borrowings under line of credit | (15,000 | ) | — | (23,850 | ) | |||||||
Payment of loan fees in connection with refinancing | (5,532 | ) | — | — | ||||||||
Redemption of common stock | (107,679 | ) | — | — | ||||||||
Dividends paid | (12,500 | ) | — | — | ||||||||
Distribution in connection with refinancing | (234,177 | ) | — | — | ||||||||
Payments on capital lease obligations | (2,408 | ) | (1,838 | ) | (1,387 | ) | ||||||
Proceeds from issuance of long-term debt | 360,000 | — | — | |||||||||
Payments on long-term debt | (48,232 | ) | (13,737 | ) | (6,237 | ) | ||||||
Net cash used for financing activities | (50,528 | ) | (15,575 | ) | (7,624 | ) | ||||||
Increase (decrease) in cash and cash equivalents | (36,228 | ) | 21,416 | 15,864 | ||||||||
Cash and cash equivalents at beginning of period | 43,518 | 22,102 | 6,238 | |||||||||
Cash and cash equivalents at end of period | $ | 7,290 | $ | 43,518 | $ | 22,102 | ||||||
Supplemental disclosures of cash flow information | ||||||||||||
Cash paid during the year for | ||||||||||||
Income taxes, net of refunds | $ | 30,200 | $ | 19,314 | $ | 25,864 | ||||||
Interest | $ | 28,651 | $ | 12,616 | $ | 11,583 | ||||||
Increases in property, plant and equipment under capital lease obligations | $ | 39,383 | $ | 5,659 | $ | 25,705 | ||||||
Stock received from online ticket distributor | $ | — | $ | 313 | $ | — | ||||||
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Buildings and improvements | 20-30 years | |||
Leasehold improvements | Lesser of term of lease or asset life | |||
Land improvements | 15 years | |||
Fixtures and equipment | 3-7 years |
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2006 | 2005 | |||||||
Land and land improvements | $ | 24,446 | $ | 24,473 | ||||
Buildings and improvements | 317,682 | 301,548 | ||||||
Property under capital leases | 124,249 | 84,866 | ||||||
Fixtures and equipment | 238,193 | 211,957 | ||||||
Construction in progress | 17,597 | 13,886 | ||||||
Subtotal | 722,167 | 636,730 | ||||||
Less accumulated depreciation and amortization | (295,749 | ) | (249,953 | ) | ||||
$ | 426,418 | $ | 386,777 | |||||
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2006 | 2005 | 2004 | ||||||||||
Current | $ | 24,758 | $ | 19,823 | $ | 20,059 | ||||||
Deferred | (12,084 | ) | (2,513 | ) | 1,157 | |||||||
Total | $ | 12,674 | $ | 17,310 | $ | 21,216 | ||||||
2006 | 2005 | 2004 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes, net of federal tax benefit | 4.7 | 4.8 | 4.3 | |||||||||
Non-deductible expenses | 0.2 | 0.2 | 0.1 | |||||||||
Tax settlements | 0.9 | — | — | |||||||||
Other, net | 0.3 | (1.2 | ) | (0.4 | ) | |||||||
41.1 | % | 38.8 | % | 39.0 | % | |||||||
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2006 | 2005 | |||||||
Deferred tax assets: | ||||||||
Accrued employee and legal expenses | $ | 7,908 | $ | 1,214 | ||||
Deferred revenue | 1,668 | 2,066 | ||||||
Deferred lease expense | 17,055 | 15,911 | ||||||
Deferred benefit of state income taxes | 1,311 | 1,215 | ||||||
State credit carryforwards | 42 | 116 | ||||||
Other | 64 | — | ||||||
Total deferred tax assets | 28,048 | 20,522 | ||||||
Deferred tax liabilities: | ||||||||
Fixed assets | (19,530 | ) | (23,903 | ) | ||||
Other, net | (987 | ) | (185 | ) | ||||
Total deferred tax liabilities | (20,517 | ) | (24,088 | ) | ||||
Net deferred income tax assets/(liabilities) | $ | 7,531 | $ | (3,566 | ) | |||
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Term Loan B, interest due quarterly at LIBOR plus 1.875% (7.275% at September 28, 2006) with annual principal payments of $3,600 beginning in March 2007 and the remaining principal and interest due in March 2013 | $ | 360,000 | ||
Less current portion | (3,600 | ) | ||
$ | 356,400 | |||
Fiscal Year Ending | ||||
2007 | $ | 3,600 | ||
2008 | 3,600 | |||
2009 | 3,600 | |||
2010 | 3,600 | |||
2011 | 3,600 | |||
Thereafter | 342,000 | |||
$ | 360,000 | |||
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Operating Leases | ||||||||||||
To Parent | Capital Leases | |||||||||||
and Affiliates | Total | Total | ||||||||||
2007 | $ | 31,236 | $ | 41,516 | $ | 16,561 | ||||||
2008 | 30,896 | 44,663 | 16,609 | |||||||||
2009 | 30,120 | 43,901 | 16,631 | |||||||||
2010 | 30,216 | 43,513 | 16,794 | |||||||||
2011 | 31,606 | 44,640 | 15,777 | |||||||||
Thereafter | 154,398 | 297,435 | 158,524 | |||||||||
$ | 308,472 | $ | 515,668 | 240,896 | ||||||||
Amount representing interest | (124,382 | ) | ||||||||||
Present value of net minimum obligation | $ | 116,514 | ||||||||||
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2006 | 2005 | |||||||||||||||
As previously | As previously | |||||||||||||||
reported | As restated | reported | As restated | |||||||||||||
Consolidated Balance Sheets | ||||||||||||||||
Deferred income tax liabilities | $ | 9,486 | $ | 7,886 | ||||||||||||
Total liabilities | 243,512 | 241,912 | ||||||||||||||
Retained earnings (deficit) | 202,125 | 203,725 | ||||||||||||||
Total stockholders’ equity (deficit) | 207,377 | 208,977 | ||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
Provision for income taxes | $ | 11,074 | $ | 12,674 | 18,910 | 17,310 | ||||||||||
Net income | 19,724 | 18,124 | 25,656 | 27,256 | ||||||||||||
Consolidated Statements of Stockholders’ Equity (Deficit) | ||||||||||||||||
Net income | 19,724 | 18,124 | 25,656 | 27,256 | ||||||||||||
Comprehensive income | 21,214 | 19,614 | 25,656 | 27,256 | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||
Net income | 19,724 | 18,124 | 25,656 | 27,256 | ||||||||||||
Deferred income taxes | (13,684 | ) | (12,084 | ) | (759 | ) | (2,359 | ) |
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Item 13. | Other Expenses of Issuance and Distribution. |
Securities and Exchange Commission registration fee | $ | 42,800 | ||
NASD filing fee | $ | 40,500 | ||
New York Stock Exchange listing fee | $ | * | ||
Accounting fees and expenses | $ | * | ||
Legal fees and expenses | $ | * | ||
Printing and engraving expenses | $ | * | ||
Blue Sky qualification fees and expenses | $ | * | ||
Transfer agent and registrar fees and expenses | $ | * | ||
Miscellaneous expenses | $ | * | ||
Total | $ | * | ||
* | To be completed by amendment. |
Item 14. | Indemnification of Directors and Officers |
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• | we are required to indemnify our directors and officers, subject to very limited exceptions; | |
• | we may indemnify other employees and agents, subject to very limited exceptions; | |
• | we are required to advance expenses, as incurred, to our directors and officers in connection with a legal proceeding, subject to very limited exceptions; and | |
• | we may advance expenses, as incurred, to our employees and agents in connection with a legal proceeding. |
Item 15. | Recent Sales of Unregistered Securities |
• | Pursuant to a stock purchase agreement, dated August 7, 2006, and amendment thereto, dated October 4, 2006, among Cinemark USA, Inc., Century and Syufy Enterprise, LP, Cinemark USA, Inc. acquired approximately 77% of the issued and outstanding capital stock of Century. | |
• | Pursuant to a contribution and exchange agreement, dated August 7, 2006, by and between Syufy, Cinemark, Inc., Century Theatres Holdings, LLC and Cinemark Holdings, Inc., Syufy contributed the remaining shares of capital stock of Century to Cinemark Holdings in exchange for shares of Cinemark Holdings. | |
• | Pursuant to a share exchange agreement, dated August 7, 2006, by and among Cinemark Holdings, Inc. and then current stockholders of Cinemark, Inc., the stockholders, immediately prior to the consummation of the transactions contemplated by the purchase agreement and the contribution and exchange agreement referenced above, exchanged their shares of common stock of Cinemark, Inc. for an equal number of shares of Cinemark Holdings common stock. |
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Item 16. | Exhibits and Financial Statement Schedules. |
Number | Exhibit Title | |||
**1 | Form of Underwriting Agreement. | |||
2 | .1 | Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on August 11, 2006). | ||
2 | .2 | Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on August 11, 2006). | ||
**3 | .1 | Amended and Restated Certificate of Incorporation of Cinemark Holdings, Inc. filed with the Delaware Secretary of State on , 2007. | ||
**3 | .2 | Amended and Restated Bylaws of Cinemark Holdings, Inc. dated , 2007. | ||
**4 | .1 | Form of common stock certificate. | ||
4 | .2(a) | Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 93/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement onForm S-4, FileNo. 333-116292, filed June 8, 2004). | ||
4 | .2(b) | Form of 93/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement onForm S-4, FileNo. 333-116292, filed June 8, 2004). | ||
4 | .3(a) | Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K (File033-47040) filed March 19, 2003). | ||
4 | .3(b) | First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement onForm S-4/A (FileNo. 333-104940) filed May 28, 2003). | ||
4 | .3(c) | Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-047040, filed March 28, 2005). | ||
4 | .3(d) | Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
4 | .3(e) | Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K (File033-47040) filed March 19, 2003). | ||
4 | .4 | Stockholders Agreement, dated as of August 7, 2006, effective October 5, 2006, by and among Cinemark Holdings, Inc. and the stockholders party thereto (incorporated by reference to Exhibit 4.4 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). |
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Number | Exhibit Title | |||
4 | .5 | Registration Agreement, dated as of August 7, 2006, effective October 5, 2006, by and among Cinemark Holdings, Inc. and the stockholders thereto (incorporated by reference to Exhibit 4.5 to Cinemark Holdings Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). | ||
**5 | Opinion of Akin Gump Strauss Hauer & Feld LLP. | |||
10 | .1(a) | Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1994). | ||
10 | .1(b) | First Amendment to Management Agreement of Laredo Theatre, Ltd., effective as of December 10, 2003, between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement onForm S-4, File No.333-116292, filed June 8, 2004). | ||
10 | .2 | Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
10 | .3 | License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1994). | ||
10 | .4(a) | Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1993). | ||
10 | .4(b) | Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark Mexico (USA)’s Registration Statement onForm S-4, File No.033-72114, filed on November 24, 1993). | ||
+10 | .5(a) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(b) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.1 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(c) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(d) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(e) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tim Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(f) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Timothy Warner (incorporated by reference to Exhibit 10.3 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(g) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(h) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(i) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). |
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Number | Exhibit Title | |||
+10 | .5(j) | First Amendment to Employment Agreement, dated January 25, 2007, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.5(j) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). | ||
10 | .6(a) | Credit Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties to the Agreement, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to Exhibit 10.5 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
*10 | .6(b) | First Amendment to Credit Agreement dated as of March 14 2007 among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties thereto, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation, as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent. | ||
10 | .6(c) | Guarantee and Collateral Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and each subsidiary guarantor party thereto (incorporated by reference to Exhibit 10.6 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
+10 | .7(a) | Cinemark Holdings, Inc. 2006 Long Term Incentive Plan, dated December 22, 2006 (incorporated by reference toExhibit 10.7(a) to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | ||
+10 | .7(b) | Form of Stock Option Agreement (incorporated by reference toExhibit 10.7(b) to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | ||
*10 | .8 | Exhibitor Services Agreement, dated as of February 13, 2007, by and between National CineMedia, LLC. and Cinemark USA, Inc. | ||
*10 | .9 | Third Amended and Restated Limited Liability Company Operating Agreement, dated as of February 12, 2007, by and between Cinemark Media, Inc., American Multi-Cinema, Inc., Regal CineMedia, LLC and National CineMedia, Inc. | ||
21 | Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | |||
*23 | .1 | Consent of Deloitte & Touche LLP. | ||
*23 | .2 | Consent of Grant Thornton LLP. | ||
**23 | .3 | Consent of Akin Gump Strauss Hauer & Feld LLP (included in the opinion filed as Exhibit 5 to this Registration Statement). | ||
24 | Power of Attorney (included on the signature page of Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). |
* | Filed herewith. | |
** | To be filed by amendment. | |
+ | Management contract, compensatory plan or arrangement. |
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By: | /s/ ALAN W. STOCK |
Name | Title | Date | ||||
* | Chairman of the Board of Directors and Director | March 16, 2007 | ||||
/s/ ALAN W. STOCK | Chief Executive Officer (principal executive officer) | March 16, 2007 | ||||
/s/ ROBERT COPPLE | Executive Vice President; Treasurer and Chief Financial Officer (principal financial and accounting officer) | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
* | Director | March 16, 2007 | ||||
*By: | /s/ MICHAEL CAVALIER Michael Cavalier Attorney-in-Fact |
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Number | Exhibit Title | |||
**1 | Form of Underwriting Agreement. | |||
2 | .1 | Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on August 11, 2006). | ||
2 | .2 | Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on August 11, 2006). | ||
**3 | .1 | Amended and Restated Certificate of Incorporation of Cinemark Holdings, Inc. filed with the Delaware Secretary of State on , 2007. | ||
**3 | .2 | Amended and Restated Bylaws of Cinemark Holdings, Inc. dated , 2007. | ||
**4 | .1 | Form of common stock certificate. | ||
4 | .2(a) | Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 93/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement onForm S-4, FileNo. 333-116292, filed June 8, 2004). | ||
4 | .2(b) | Form of 93/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement onForm S-4, FileNo. 333-116292, filed June 8, 2004). | ||
4 | .3(a) | Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K (File033-47040) filed March 19, 2003). | ||
4 | .3(b) | First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement onForm S-4/A (FileNo. 333-104940) filed May 28, 2003). | ||
4 | .3(c) | Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-047040, filed March 28, 2005). | ||
4 | .3(d) | Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
4 | .3(e) | Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K (File033-47040) filed March 19, 2003). | ||
4 | .4 | Stockholders Agreement, dated as of August 7, 2006, effective October 5, 2006, by and among Cinemark Holdings, Inc. and the stockholders party thereto (incorporated by reference to Exhibit 4.4 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). | ||
4 | .5 | Registration Agreement, dated as of August 7, 2006, effective October 5, 2006, by and among Cinemark Holdings, Inc. and the stockholders thereto (incorporated by reference to Exhibit 4.5 to Cinemark Holdings Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). | ||
**5 | Opinion of Akin Gump Strauss Hauer & Feld LLP. |
Table of Contents
Number | Exhibit Title | |||
10 | .1(a) | Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1994). | ||
10 | .1(b) | First Amendment to Management Agreement of Laredo Theatre, Ltd., effective as of December 10, 2003, between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement onForm S-4, File No.333-116292, filed June 8, 2004). | ||
10 | .2 | Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
10 | .3 | License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1994). | ||
10 | .4(a) | Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report onForm 10-K, File No.033-47040, filed March 31, 1993). | ||
10 | .4(b) | Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark Mexico (USA)’s Registration Statement onForm S-4, File No.033-72114, filed on November 24, 1993). | ||
+10 | .5(a) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(b) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.1 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(c) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(d) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(e) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tim Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(f) | First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Timothy Warner (incorporated by reference to Exhibit 10.3 to Cinemark, Inc.’s Current Report onForm 8-K, File No. 001-31372, filed December 18, 2006). | ||
+10 | .5(g) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(h) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(i) | Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA, Inc.’s Quarterly Report onForm 10-Q, File No.033-47040, filed May 14, 2004). | ||
+10 | .5(j) | First Amendment to Employment Agreement, dated January 25, 2007, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.5(j) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007). |
Table of Contents
Number | Exhibit Title | |||
10 | .6(a) | Credit Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties to the Agreement, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to Exhibit 10.5 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
*10 | .6(b) | First Amendment to Credit Agreement dated as of March 14, 2007 among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties thereto, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation, as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent. | ||
10 | .6(c) | Guarantee and Collateral Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and each subsidiary guarantor party thereto (incorporated by reference to Exhibit 10.6 to Current Report onForm 8-K, File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on October 12, 2006). | ||
+10 | .7(a) | Cinemark Holdings, Inc. 2006 Long Term Incentive Plan, dated December 22, 2006 (incorporated by reference toExhibit 10.7(a) to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | ||
+10 | .7(b) | Form of Stock Option Agreement (incorporated by reference toExhibit 10.7(b) to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | ||
*10 | .8 | Exhibitor Services Agreement, dated as of February 13, 2007, by and between National CineMedia, LLC and Cinemark USA, Inc. | ||
*10 | .9 | Third Amended and Restated Limited Liability Company Operating Agreement, dated as of February 12, 2007, by and between Cinemark Media, Inc., American Multi-Cinema, Inc., Regal CineMedia, LLC and National CineMedia, Inc. | ||
21 | Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). | |||
*23 | .1 | Consent of Deloitte & Touche LLP. | ||
*23 | .2 | Consent of Grant Thornton LLP. | ||
**23 | .3 | Consent of Akin Gump Strauss Hauer & Feld LLP (included in the opinion filed as Exhibit 5 to this Registration Statement). | ||
24 | Power of Attorney (included on the signature page of Cinemark Holdings, Inc.’s Registration Statement onForm S-1, File No. 333-140390, filed February 1, 2007). |
* | Filed herewith. | |
** | To be filed by amendment. | |
+ | Management contract, compensatory plan or arrangement. |